{"id":9900,"date":"2015-07-10T06:57:27","date_gmt":"2015-07-10T11:57:27","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9900"},"modified":"2015-07-10T06:57:27","modified_gmt":"2015-07-10T11:57:27","slug":"oil-price-plunge-raises-fears-for-indebted-shale-companies","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9900","title":{"rendered":"Oil Price Plunge Raises Fears for Indebted Shale Companies"},"content":{"rendered":"

Oil Price Plunge Raises Fears for Indebted Shale Companies<\/a><\/h3>\n

The latest fall in oil prices is once again putting pressure on indebted shale companies.<\/p>\n

After\u00a0falling<\/a>\u00a0from over $100 per barrel down to $43 per barrel at its lowest point in March of this year, WTI prices rebounded with a 40 percent rise, trading for more or less $60 per barrel for May and June.<\/p>\n

The rebound appeared to spell the end to the worst of the glut, with production plateauing, if not falling, and demand starting to rise. Although estimates were all over the map, many saw a strong bounce coming in the oil markets, with some even predicting\u00a0supply shortages<\/a>\u00a0before the end of the year.<\/p>\n

A few companies donned a renewed sense of confidence, suggesting that they would\u00a0start drilling again<\/a>\u00a0with oil prices in the $60-per-barrel range.<\/p>\n

Related:\u00a0OPEC Still Holds All The Cards In Oil Price Game<\/strong><\/a><\/p>\n

Still, mountains of\u00a0debt<\/a>\u00a0had accumulated across the U.S. shale sector. That didn\u2019t go away but was sort of on hold as drillers, and their financial backers, hoped that further price increases would allow them to pay down debt. To stay afloat, drillers issued new debt and equity.<\/p>\n

But the renewed plunge in oil prices is kicking off a fresh round of debt concerns. Bloomberg\u00a0reported<\/a>\u00a0that energy-related junk bonds have lost 3 percent of their value in the last two weeks, after WTI crashed to nearly $51 per barrel and Brent fell below $57. Bond traders are avoiding high-yield, high-risk debt, and yields have jumped to nearly 10 percent, a level normally associated with default risk.<\/p>\n

\u201cThe energy sector of the high-yield market continues to be a silo of misery,\u201d Margie Patel with Wells Capital Management, told Bloomberg telephone interview. \u201cIf we stay near these levels, marginal high-cost producers won\u2019t be able to survive.\u201d<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Oil Price Plunge Raises Fears for Indebted Shale Companies The latest fall in oil prices is once again putting pressure on indebted shale companies. After\u00a0falling\u00a0from over $100 per barrel down to $43 per barrel at its lowest point in March of this year, WTI prices rebounded with a 40 percent rise, trading for more or […]<\/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":[588,592,1775,595,596,5332,600,723,846],"class_list":["post-9900","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-oil","tag-oil-price","tag-oil-price-collapse","tag-oil-production","tag-oil-supply","tag-oilprice-com","tag-opec","tag-shale-oil","tag-us-shale-oil"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9900","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=9900"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9900\/revisions"}],"predecessor-version":[{"id":9901,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9900\/revisions\/9901"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}