Quantcast

2020: Oil Bankruptcies Will Mean Higher Prices for Consumers

(OilPrice.com) A bankruptcy boom has hit the oil and gas industry, and it’s just getting started. Investors have lost their appetite for shale, and energy debt has become among the least desirable in the market. 

The industry has been teetering on the verge of mass hysteria for much of 2019 as a record number of energy companies folded.  

According to Energy and Restructuring law firm Hayes and Boone’s, a grand total of 50 energy companies filed for bankruptcy during the first nine months of the year, including 33 oil and gas producers, 15 oilfield services companies and two midstream companies.

In contrast, 43 oil and gas companies filed for bankruptcy for the whole of 2018. 

The biggest oil and gas bankruptcy of the year–indeed, the biggest since 2016–was EP Energy, which filed for bankruptcy in October, unable to pay back some $5 billion in debt. 

Now, some observers are warning that the shakeout will pick up serious momentum in 2020. 

Companies with junk-rated bonds have been defaulting on interest payments at record levels, while dozens of smaller drillers that had saddled themselves with too much debt have been dropping like flies.

Ultimately, the ongoing shakeout is likely to leave the industry in a much better patch, though not so much for the consumer who will have to contend with higher oil prices thanks to higher levels of production discipline.

[Read more…]

TRENDING NOW

Who Is Experiencing the Most (and Least) Price Inflation?

(Economic Policy Journal) According to Bloomberg, low-income Americans are getting hit hardest by price increases as the economy starts to open up.

Armed Man Barricaded Inside Honolulu Hotel Room

(Associated Press) An armed man who barricaded himself inside a hotel room at a resort in Honolulu and fired shots through the...

Biden Sees ‘Win’ for US in Electric Vehicle Battery Deal

(Associated Press) Two big South Korean electric vehicle battery makers said Sunday they have settled a long-running trade dispute that will allow...

Marxist BLM Founder Spends Millions on High-End Homes

(Cassandra Fairbanks, Gateway Pundit) Black Lives Matter co-founder and self-described Marxist Patrisse Khan-Cullors has bought not just one, but four high-end homes,...

Feds Charge 3 More in Massive California Unemployment Fraud

(Associated Press) Federal prosecutors said Friday that they have charged three Southern California women with using prison inmates' names to bilk a...