Some of the biggest oil producers in the United States are starting to get into bigger and bigger trouble as they have been struggling to cope with the crash of oil prices in the last few years.
Across the middle of the United States, between Texas and North Dakota, shale oil drilling and extraction, known as “Fracking”, was a boom industry during much of the financial crash, while other industries in the area floundered. This was supported by high oil prices; usually above $100 a barrel. However, since teh end of the financial crisis, the price of oil plummetted by almost half, now trading around $50 a barrel.
This means that producers who had developed their business plans assuming $100 a barrel now see their budgets cut in half, and many are scrambling to try to make up the difference. Until recently, Wall Street has stepped in and extended credit limits and bought stocks and bond issued by the producers, but those times may be coming to an end as the low prices may be here to stay.
Deal or No Deal
Correlation Analysis
HowTheMarketWorks Videos
