Energy Bonds Take A Hit, but Offer Reasons for Optimism

The double shot of growing global trade tensions coupled with higher than expected OPEC+ production guidance drove oil prices lower and yields on energy bonds substantially higher. However, even among the hardest hit companies, there is reason to believe the sector is better positioned to ride out the storm than in past. Since 2020, companies have been focused on paying down debt and reinforcing their balance sheets, leading to substantially stronger credit metrics and longer liquidity runways. Spencer Cutter, Senior Credit Analyst, discusses the situation in more detail here.