Commodity prices at multi-year lows drove a rise in defaults early this year, and the oil sector could see still more unprofitable fields shut, industry analysts said on Wednesday.
Debt defaults in the commodity sectors rose in the first two months of 2016 from the same period a year ago, credit ratings agency Moody's said.
"Of the 18 defaults since the start of the year, half have been in commodity sectors," said Sharon Ou, a Moody's vice president and senior credit officer, in an e-mailed statement late on Tuesday.
For the same period last year, there were 11 defaults in total and only one in commodities, Ou said.
Global oil dropped to their lowest since late 2003 at the start of 2016, while copper hit a 6-1/2-year low, both depressed by excess supply and a slowdown in China.
Of the 10 default cases in February, two were of sizable amounts, Ou said.
Pacific Exploration and Production Corp defaulted on $3.7 billion in debt and Paragon Offshore PLC on $2.3 billion, she said.
Poor economics could lead more oilfields to shut after oil prices touched
marginal cash cost levels at $30-$40 a barrel, Bernstein analysts separately said in a note.
"With only two months into 2016 we find cumulative shut-in production has already reached 60,000 bpd (barrels per day) and up to 260 million barrels of reserves," Bernstein said.
These fields were onshore or in shallow water in Norway
, Colombia, Brazil, China and Timor Leste, the analysts said.
"Given companies are watching field, well economics and maintenance costs closely this year we expect more examples adding further support for higher prices," Bernstein said.
(Reporting by Florence Tan; Editing by Tom Hogue)