Distressed oil and gas bonds improve as crude gyrates; AK Steel bonds continue to firm

By Stephanie N. Rotondo

Seattle, April 20 – The distressed energy space remained in focus on Wednesday as domestic crude oil prices gyrated.

Oil was initially lower on Wednesday, as investors grew concerned about inventory builds and production.

But after the U.S. Energy Information Administration reported that crude inventories increased less than the amount projected by the American Petroleum Institute and that domestic production had fallen for the sixth consecutive week, oil prices rallied.

The volatility in the commodity resulted in gyrations for oil and gas-linked securities, which ultimately ended mostly higher for the day.

“All as oil firmed on the day,” a trader said.

WPX Energy Inc.’s 6% notes due 2022 inched up a point to 88, the trader said.

Denbury Resources Inc. paper was also better. A trader said the 4 5/8% notes due 2023 rose 1½ points to 53½, as another market source deemed the 6 3/8% notes due 2021 nearly 2 points higher at 59½ bid.

In EP Energy Corp. debt, the 9 3/8% notes due 2020 were seen up over a point at 62.

AK Steel Holdings Corp.’s bonds meantime continued to improve following news of price increases over the last week.

One trader said the 7 5/8% notes due 2020 were “pretty active” at 85½, which he called up a point. A second source called the issue up a deuce at 85¾.

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