09-10-2015, 09:36 PM
A funding squeeze threatens to cut U.S. oil output by as much as half a million barrels a day by the end of the year, with shale producers among the worst affected, Citigroup Inc. said. “Capital markets thus far have plugged shale’s funding gap but are showing signs of tightening, with impacts for drilling, oil supply and global prices,” Richard Morse and Ed Morse, analysts at Citigroup in New York, said in a note. Access to high-yield credit markets for debt-strapped producers is “sharply contracting,” they said.
Citigroup sees U.S. oil output losing 500,000 bpd
The main reason behind the crash this time? As everybody who watches the financial networks knows, China is falling apart, and so is its oil demand. But there is just one thing… The data actually shows that China’s oil demand is holding up just fine. There has been no drop in China’s continued growth in oil demand in 2015. Focus on my wording there please. Not only is China’s demand for oil not falling, it is continuing to grow at a rate that is in line with recent years.
Everybody Panic… China’s Oil Demand Is Crashing!!! - The Daily Reckoning
U.S. oil exploration and production companies have been living on the Federal Reserve's easy money throughout the sharp downturn in crude prices, but their credit supply is about to run dry, oil analyst Stephen Schork said Wednesday. "The E&Ps have been bleeding. They're going to start to hemorrhage in the next couple of months," the publisher of the Schork report told CNBC's "Squawk Box."
US drillers about to start hemorrhaging: Schork
Now that the back end of the price curve has now crashed, exploration and production companies are unable to hedge to the same degree, he said. These drillers face a re-evaluation of their credit in the fall, and banks are likely to significantly reduce their ability to borrow, Schork added.
US drillers about to start hemorrhaging: Schork
It’s the cheapest opportunity in six years to be a shareholder in Europe’s largest oil and gas company. BG Group Plc, the oil and gas producer Royal Dutch Shell Plc agreed to buy for about $70 billion, is trading at a price equivalent to paying just over 14 pounds ($21.53) for a Shell B share, according to data compiled by Bloomberg. That would be the lowest valuation for Shell since the global recession of 2009 and a discount of 13% to the company’s current share price.
Shell cheapest in 6 years for buyers braving takeover doubts