Reply With Quote
So Saudi Arabia can tell them all at once " you, we aren't taking the hit on production cuts this time". It will be pep talk and "stay the course"
Venezuela is crying their asses off. They were the biggest cheaters on the previous"cuts".
They are figuring out that shale is gonna be harder to kill than they thought. They will kill it eventually though.
The shale boom runs on borrowed money. With effective interest rates near zero investors were jumping on 5% junk bonds issued by the little oil companies and drillers. With 248 Billion of energy junk bond debt out there a lot of investors are about to get burned. As they run out of money and start defaulting the money flow will stop and a lot of them will go broke. The weak ones will drive up the borrowing cost for the strong ones as investors start demanding much richer rates to take on the risk. It will take awhile to rebuild the industry when that happens.
