Posted on 01/24/2016 9:05:27 AM PST by Lorianne
Last year, 42 North American drillers filed for bankruptcy, according to law firm Haynes and Boone. It's only likely to get worse this year.
Experts say there are a lot of parallels between today's crisis and the last oil crash in 1986. Back then, 27% of exploration and production companies went bust.
Defaults are skyrocketing again. In December, exploration and production company defaults topped 11%, up from just 0.5% the previous year, according to Fitch Ratings. That's a 2,000%-plus jump.
It's just the beginning, says John La Forge, head of real assets strategy at Wells Fargo. If history repeats, people should prepare for the default rate to double in the next year or so.
No wonder America's biggest banks are setting aside a lot of money in anticipation that more energy companies will go belly up.
(Excerpt) Read more at money.cnn.com ...
Obama wants coal and oil to die.
A Federal Reserve, zero interest rate, QE sponsored bubble, which will have to be followed up by a Federal Reserve sponsored, negative interest rate bailout.
I can just hear the glee from the left. Those EVIL oil companies are finally going down!
What are the odds that 99.9% of those in the east are using some form of fossil fuel to keep warm during their Blizzard of 2016.
Too big to fail?
I wont say it.
Exactly. I'm sure Obozo will step in and give them a bail out.
If they REALLY want help they’ll give Hillary $600,000 to ‘give a speech’ if you know what I mean...
This is exactly what the Saudis intended, to shut down resurgent US production. We’ll have cheap oil again in the interim, but it won’t always be cheap, and we’re headed back to square one as far as being independent.
how dare you!!!
dont you know these are economic GENIUSES making these decisions that past seven years!!
0 percent interest boosts borrowing!!! businesses are popping up like daisies.
the market is going to 20k!!
i should have gotten out and into safe assets in my 401k when it was still above 17k.
this whole scheme is about to come apart at the pieces,
Really. We’re in a far better position than the Saudi’s. Won’t take much for the upstream side to kick in again, but spending down on the piggybank can be disastrous for the Saudi’s.
Iraq sold oil at $22 / barrel on Thursday. Ditto Venezuella.
Ya doesn’t all of this play into the hands of liberals, who want us off of fossil fuels??? Those people are actually happy to hear of hardships in the energy business.
You think they’ll recover quickly despite widespread bankruptcies and as a result, another looming financial crisis?
Yep, and that's why as I much as I hate to say it, there does need to be some government control over energy production, as a matter of national security. How much blood and treasure has been lost for the sake of ensuring the flow of Saudi oil?
Not entirely. There have been many people saying for a while that shale oil for example is a Ponzi scheme that could only work if the price of oil continually rises.
Here is just one of them but there have been scads of such predictions the last 5-7 years. Looks like they were right.
Why Shale Oil Is a Ponzi Scheme
http://www.thestreet.com/story/13080666/1/dan-dicker-on-why-shale-oil-is-a-ponzi-scheme.html
Think Standard Oil...
They were holding on pretty well until it dropped below $50.00. That doesn’t sound like a Ponzi scheme to me.
If you have to rely on something continually rising in price than that is essentially a Ponzi (and a bubble).
It’s the continually falling that has caused a problem, not just with shale but with higher cost producers the world over. Russia, Venezuela, quite a few. There is a cost to get it out of the ground that varies. Saudi is the cheapest. By that measure, all oil but Saudi oil is a Ponzi Scheme. Obviously that’s not correct. The lowest cost producer is driving competition out of business by intentionally flooding the market, is what’s happening.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.