By pouring billions of dollars into energy shares and bonds in the past few months these newcomers, dubbed “energy tourists” by Houston’s seasoned dealmakers, have thrown a lifeline to scores of companies that a few months ago looked like potential targets for bigger rivals or distressed debt and restructuring specialists.
I’m getting more and more cynical each day, but with that being said... Couldn’t this little statement actually be the ‘real’ reason oil prices crashed?
As for myself it ‘feels’ right to me.
Couldn’t this little statement actually be the ‘real’ reason oil prices crashed? Prices crashed because production grew faster than consumption, and it did for an extended period of time.
Production grew rather quickly because the prices were high enough to justify spending more than before on marginal portions of oil plays that at lower prices would not be economic.
With significant money as a return on investment, in a situation lasting for years, more investment dollars are going to enter the industry. Just like any industry; it is how a market responds to price increases.