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US oil & Gas liquidity stress at worst-ever level: Moody's

[NEW YORK] US oil and gas companies, struggling with a steep fall in global crude prices, faced the worst-ever conditions to get cash to run their businesses, according to a report from Moody's Investors Service.

The rating agency said its "Oil & Gas Liquidity Stress Index" surged to a record high of 27.2 per cent in February, surpassing a previous high of 24.5 per cent touched during the last recession.

"The prolonged weakness in energy sector credit conditions is driving the sustained increase in the LSI," said John Puchalla, a senior vice president at Moody's.

The agency downgraded its ratings on 19 energy companies last month, 17 of which were exploration and production firms.

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Moody's composite LSI jumped to 8.9 per cent in February, from 7.9 per cent in mid-January, and is now at the highest level since November 2009. "This progression signals that the default rate will continue to rise as the year progresses," Puchalla said in a statement.