Oil crisis rocks Colombian oil companies' share value

The Colombian and Latin American press have been heavily covering the poor performance of Latin America’s oil companies in the stock exchange. Ecopetrol has crashed below its previous floor of 2000 pesos a share to just 955 pesos per share this week, four times less than where it was in September 2014.

Colombian business journal Portafolio asked the unthinkable of whether Ecopetrol’s share place could plunge even lower, to just 700 pesos a share. Diego Franco, a financial and stock analyst, warned that if oil prices plunge below $30 per barrel, they could go even lower, which would simply increase sales of Ecopetrol and other oil companies. Analysts recommend calm for investors, as they all keep their eyes peeled for any sign of a rebound.

The Colombian Herald however agreed with various analysts that investors should avoid selling Ecopetrol until oil prices recover somewhat, at least to $40 per barrel. The Herald also blamed China for the flurry of selling, arguing that the uncertainty regarding China’s economy and the possibility of continually growing global oil reserves have driven down Ecopetrol’s share value.

In oil-related news, Colombia is continuing to work on large gold mining projects despite falling gold prices. Latin One explained that the falling value of the Colombian peso has offset falling gold prices, mitigating their impact on large mining companies such as Continental Gold, Red Eagle Mining, and Mineros S.A.