Energy Joins Miners as Europe's Riskiest Surpassing Banks: Chart

  • Five-year CDS spreads exceeded financial companies on Jan. 14
  • Mining companies became riskiest last month after price rout

Finding Signs of Price, Demand Hope in Oil Markets

Europe’s biggest oil producers have joined mining companies as the continent’s riskiest investments as the slump in commodities sees them eclipse financial firms, credit default swaps show.

Five-year credit default swaps -- the cost of insuring debt against default -- of Europe’s biggest oil companies have surged this year, led by Madrid-based Repsol SA and BP Plc. Among investment-grade companies, oil majors surpassed financial firms as the riskiest in Europe after mining houses on Jan. 14 as crude dropped 21 percent this year. Anglo American Plc’s credit default swaps lead the materials sector as a rout in the mining industry drives up the risk of debt defaults.

While nobody expects oil companies such as BP and Royal Dutch Shell Plc to default on their debt, the slump in crude and the companies’ pledge to maintain dividend payouts are stretching their balance sheets.

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