A federal bailout of troubled credit markets may not be enough to ease financing concerns in the energy industry, officials said Wednesday.
Oil and gas companies already have been hurt this year by a steep drop in energy prices that has caused their shares to plummet.
The troubles have been exa cerbated by tightening credit from last week’s market meltdown, and a proposed $700 billion bailout may not be enough to reverse the damage, energy- industry officials said.
“The energy sector has really gotten beat up,” said David Tameron, an equity analyst with Wachovia Securities. “A bailout may ease some of the concerns, but it’s not something that’s necessarily going to be rectified overnight.”
Tameron said that uncertain prospects in Congress for the bailout and a lack of details have left energy companies nervous about their credit-raising capabilities.
Crude-oil prices have risen about $15 a barrel in the past week as investors have moved money back into commodities on fears that the bailout will weaken the dollar and boost inflation.
Natural-gas prices are up 11 percent this week.
But since crude hit a record high in early July, shares of energy companies have fallen sharply.
Denver-based gas producer Bill Barrett Corp. is down 42 percent since July 1. Forest Oil Corp., also of Denver, is off 32 percent. Anadarko Petroleum, with extensive Colorado operations, has declined 26 percent.
“An economic downturn results in reduced demand for petroleum products, and that has a direct negative impact on the profitability of refiners and marketers,” said Steve Doug las, vice president at Suncor, which operates a Denver oil refinery.
Marc Smith of the Independent Petroleum Association of Mountain States said that “when less capital is available to U.S. independent oil and natural-gas companies, the industry drills fewer wells, resulting in lower supplies. In the end, consumers will be hurt the most.”
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
