{"id":51719,"date":"2020-03-10T11:05:17","date_gmt":"2020-03-10T16:05:17","guid":{"rendered":"https:\/\/olduvai.ca\/?p=51719"},"modified":"2020-03-10T11:05:20","modified_gmt":"2020-03-10T16:05:20","slug":"the-great-american-shale-oil-bust-turns-into-massacre","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=51719","title":{"rendered":"The Great American Shale-Oil Bust Turns into Massacre"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/wolfstreet.com\/2020\/03\/09\/great-american-shale-oil-bust-turns-into-massacre\/\">The Great American Shale-Oil Bust Turns into Massacre<\/a> <\/h3>\n\n\n\n<p><strong>Shares of shale oil drillers collapsed by 25%-50% today. Their bonds got massacred. Saudi-Russia price-war strategy appears successful in wiping out investors in the US shale-oil sector.<\/strong><\/p>\n\n\n\n<p>It was so chaotic and brutal in the crude oil market today that the EIA, which is part of the US Department of Energy, emailed out a statement that it would have to delay its monthly Energy Outlook to figure in all the chaos: \u201cWe have delayed the release of the Short-Term Energy Outlook to allow time to incorporate recent global oil market events. The outlook will now be released Wednesday, March 11, at 9:00 a.m.\u201d<\/p>\n\n\n\n<p>Shares of Occidental Petroleum, which is heavily involved in US shale oil and gas, collapsed by 53% today to $12.51. They\u2019re down 85% since October 2018, when phase two of the Great American Oil Bust set in, with phase one having commenced in July 2014:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2020\/03\/US-OXY-2020-03-09-.png\" alt=\"\" class=\"wp-image-58315\"\/><\/figure>\n\n\n\n<p>Oxy\u2019s bonds \u2013 those that even traded \u2013 collapsed today. For example, this $750 million 30-year senior unsecured bond, with a coupon interest of 4.1%, closed on Friday at 92.5 cents on the dollar. Like many bonds, they don\u2019t trade much, but are stuck in bond funds or held by institutional investors, and it\u2019s hard to sell them because there are not many buyers.<ins><\/ins><\/p>\n\n\n\n<p>Today, there are only two trades listed on&nbsp;<a href=\"http:\/\/finra-markets.morningstar.com\/BondCenter\/Default.jsp\">FINRA-Morningstar<\/a>, but they were big trades, with institutional investors unloading them for whatever they could get. So the price today collapsed by 34% from the close on Friday, and by 39% over the past three trading days, to 61 cents on the dollar:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2020\/03\/US-OXY-bonds-2020-03-09-.png\" alt=\"\" class=\"wp-image-58327\"\/><\/figure>\n\n\n\n<p>Shares of Chesapeake Energy, a former shale oil-and-gas giant, particularly focused on natural gas, plunged 28% today, from nearly nothing to almost nothing, closing at $0.16. The company has been dilly-dallying around near the bankruptcy-filing counter for years, without having filed yet, as investors continued to feed it fresh cash and agreed to haircuts and restructure its debts. But that fresh-cash option appears to be off the table.<\/p>\n\n\n\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Great American Shale-Oil Bust Turns into Massacre Shares of shale oil drillers collapsed by 25%-50% today. Their bonds got massacred. Saudi-Russia price-war strategy appears successful in wiping out investors in the US shale-oil sector. It was so chaotic and brutal in the crude oil market today that the EIA, which is part of the [&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":[596,701,3928,1919,827,4254,4255],"class_list":["post-51719","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-oil-supply","tag-saudi-arabia","tag-shale-oil-bust","tag-shale-oil-industry","tag-united-states","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51719","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=51719"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51719\/revisions"}],"predecessor-version":[{"id":51720,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51719\/revisions\/51720"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=51719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=51719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=51719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}