US Energy Industry Struggles With Worst Default Record Since 1999

Two US oil and gas producer defaults propelled the energy high-yield default rate to a record 13%, surpassing the 9.7% mark set in 1999, according to the Fitch Ratings agency.

MOSCOW (Sputnik) — The default rate in the struggling US energy industry has reached a record high, climbing to 13 percent in 2016, the Fitch Ratings agency said. 

NewFilings Propel US Energy HY Default Rate to Record 13% #FitchWire https://t.co/PifVgrbzEa pic.twitter.com/JWZPBiTg0x

— Fitch Ratings (@FitchRatings) 2 May 2016

​"Two oil and gas producer defaults have propelled the energy high-yield default rate to a record 13%, surpassing the 9.7% mark set in 1999," Fitch Ratings said in a press release adding that the default rate among US oil companies may rise further to 20 percent by the end of the year.

The ranks of bankrupt US energy companies were swelled by Ultra Petroleum and Midstates Petroleum on Monday. Struck by the persistent slump in oil prices, the two companies had accumulated nearly $6 billion in combined debt before filing for bankruptcy protection in Texas.

Global oil prices plunged from $115 to less than $30 per barrel between June 2014 and January 2016, hitting their lowest levels since 2003 amid an ongoing glut in global oil supply. The prices have since recovered to around $40-45 per barrel for the Brent crude benchmark.