In spring 2020,
oil demand
fell sharply,
just when global
oil production
was peaking.
176 rigs drilling for oil
in the U.S. last week,
according to oil-field
services company
Baker Hughes, for the
lowest count since 2004.
That's a decline
of 588 rigs, from
764 one year ago.
Hardest hit are the
U.S. shale drillers,
now in survival mode,
but still maintaining
production, which
hurts the industry.
As a group,
the shale oil
producers
have never
made a profit.
For the rest of 2020:
Expect more ayoffs,
capital investment cuts,
and bankruptcies,
if WTI crude oil stays
under $50 a barrel.
The shale oil
business model
is broken.
But then it always was !
Prior borrowing
was invested
in more oil production,
so most shale producers
now have HUGE debts,
which are sinking them.
In the first half of 2020,
23 of the U.S.
shale oil companies
filed for bankruptcy
protection, with
a collective debt load
of over $30 billion.
More debt is maturing
over the next two years,
which means even more
bankruptcies areahead.