Oil Industry Is Over Leveraged And Needs $65 Oil

The oil industry is overcapitalized, over leveraged and needs >$65/b oil to survive according to a research report issued to clients of Oppenheimer. According to Oppenheimer’s analysis, the prevailing low oil prices are unsustainable in a world accustomed to $100/barrel oil. High prices accelerated industry cost inflation, boosted oil supply and curbed oil demand growth. As a result, the $100/bbl environment to which the industry has become accustomed to has left many producers over-capitalized and over leveraged. The report goes on to criticize both lenders and borrower who are both to blame for the oil industry debt bubble. Energy companies now account for…