{"id":10702,"date":"2015-08-04T07:59:37","date_gmt":"2015-08-04T12:59:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10702"},"modified":"2015-08-04T07:59:37","modified_gmt":"2015-08-04T12:59:37","slug":"oil-re-bloodies-the-smart-money","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10702","title":{"rendered":"Oil Re-Bloodies the \u201cSmart Money\u201d"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/08\/04\/oil-gas-re-bloodies-private-equity-investments-smart-money\/\" target=\"_blank\">Oil Re-Bloodies the \u201cSmart Money\u201d<\/a><\/h3>\n<p><strong>The \u201cliquidity death spiral.\u201d<\/strong><\/p>\n<p>Oil plunged\u00a0<em>again<\/em>\u00a0on Monday, with West Texas Intermediate down over 4%. At $45.17 a barrel, it\u2019s just a hair away from this year\u2019s oil-bust low. During 8 weeks in a row of relentless declines, WTI had plunged 26%. July\u2019s 21% drop was the largest monthly decline since the Financial Crisis collapse in 2008.<\/p>\n<p>There\u2019s a laundry list of perceived reasons: The rig count has been rising again. Shale oil companies, like Whiting Petroleum, are bragging about \u201crecord\u201d production to prop up their shares. Production in Russia has been strong. And OPEC, powered by Saudi Arabia and increasingly Iraq,\u00a0<a href=\"http:\/\/www.reuters.com\/article\/2015\/08\/03\/us-markets-oil-iduskcn0q508120150803\" target=\"_blank\">raised production<\/a>\u00a0in July to 32 million barrels per day.<\/p>\n<p>There\u2019s the dreaded surge of Iranian oil onto the world markets. Just this weekend, Iran\u2019s oil minister mused that his country could raise oil production by 500,000 bpd<em>within a week<\/em>\u00a0of when the sanctions would be lifted and by 1 million bpd\u00a0<em>within a month<\/em>.<\/p>\n<p>It gave oil markets the willies. They were already fretting over the slowdown in China, the crude oil inventories in the US, at a record for this time of the year, the oil inventories in other developed markets, and even oil stored in leased tankers. Oil everywhere, it seems.<\/p>\n<p>Whatever the perceived reasons, the price of oil has gotten re-crushed, and so has the hope a few months ago that this would be over by now.<\/p>\n<p><a href=\"https:\/\/www.moodys.com\/research\/Moodys-Weak-energy-prices-fuel-rise-in-US-corporate-defaults--PR_331452\"><u>Moody\u2019s<\/u><\/a>\u00a0is ringing alarm bells over a wave of defaults among US oil and gas companies: \u201cThe energy price slide continues to create operating and liquidity pressures for the oil and gas sector, which contributed to seven of the 15 defaults recorded and accounts for a large share of companies with low ratings and weak liquidity.\u201d And it expected the energy sector \u201cto be a primary driver of defaults over the next year.\u201d<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Oil Re-Bloodies the \u201cSmart Money\u201d The \u201cliquidity death spiral.\u201d Oil plunged\u00a0again\u00a0on Monday, with West Texas Intermediate down over 4%. At $45.17 a barrel, it\u2019s just a hair away from this year\u2019s oil-bust low. During 8 weeks in a row of relentless declines, WTI had plunged 26%. July\u2019s 21% drop was the largest monthly decline since [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[130,441,487,541,588,1775,600,1109,701,4254,6118],"class_list":["post-10702","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-china","tag-iran","tag-liquidity","tag-moodys","tag-oil","tag-oil-price-collapse","tag-opec","tag-sanctions","tag-saudi-arabia","tag-wolf-richter","tag-wolf-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10702","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10702"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10702\/revisions"}],"predecessor-version":[{"id":10703,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10702\/revisions\/10703"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}