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Energy's struggles are far from over: Analyst

Energy distress: Far from finish line

Many energy stocks continue to struggle as some oil company debt sits at distressed levels. Those trends point to tough times in the energy sector continuing, a credit analyst said Tuesday on CNBC.

"We are far from the finish line in this whole story in the energy sector, Oleg Melentyev, head of U.S. credit strategy at Deutsche Bank, told "Power Lunch."

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U.S. crude oil has struggled and settled down 3.4 percent at $48.29 per barrel on Tuesday. Plummeting crude prices in the last year have forced oil companies into job and rig cuts even as consumers enjoyed falling gas prices.

A floorhand works on an oil rig in the Bakken shale formation outside Watford City, North Dakota.
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Some oil stocks have seen a huge slip in just the last month. For instance, Clayton Williams Energy and Rowan Cos have shed about 31 and 21 percent, respectively, in that span.

The S&P energy sector was down more than 1 percent on Tuesday.

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Many oil company bonds continue to trade at distressed levels, as well, Melentyev added. Some are staying at such positions as crude's movement remains volatile.

"It is kind of the market's way of saying these names will have tough times," he said.

Melentyev noted, though, that many oil companies could withstand the low price cycle or even benefit from it.