Oil: Prolonged period of low prices could do serious damage to the industry
|The OPEC+ group, the cartel plus Russia is scheduled to hold a video conference on Thursday to discuss how to bolster oil prices. Joseph Trevisani, an analyst at FXStreet, recaps the oil market situation.
Key quotes
“The war of threats between Saudi Arabia and Russia sent prices already under heavy pressure from the expected demand destruction, cascading lower. The finances of both nations are heavily dependent on oil revenues.”
“The US finds itself in the unusual position of agreeing with its two largest oil competitors, countries its shale production had dethroned as the world’s leading driller, an achievement touted by the Trump administration. Price pressures have made common cause.”
“Many US shale companies are heavily leveraged and a prolonged period of low prices could do serious damage to the industry. The bankruptcy rate would soar.”
“Even for a market long inured to violent movement, the turnaround among the major players has been remarkable.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.