Read this Reuters article that came out today.
(Reuters) – A string of unforeseen events have reduced oil supply, helping to rebalance the world oil market and push price forecasts higher over the last month, a Reuters poll showed on Thursday.
These events are only unforeseen if you didn’t bother to try. I myself laid out exactly this sequence of events in 2014, along with predicting the survival of the US oil and gas boom.
But the damage that was done exceeded my wildest fears. The maneuvers of OPEC over the past 24 months have been nothing less than amateur. The wreckage from this schlock judgment; pervasive.
That said, I am not sure there will be many more bankruptcies in the oil and gas sector. They are all teetering on the edge, but with prospects of oil turning higher here in a balanced market, revenues and projects should begin to return.
In December of 2015, I bet that we’d see the market bottom within 6 months. I now feel more confident of that than I did then.
The looming debt maturities for the oil & gas sector are daunting, but still wait a few years in the distance. If revenues return in the second half of this year, investors can reasonable expect that the debt will be rolled over.
Financiers have no reason to fight this process…bankruptcy is not usually much kinder to debtors than shareholders. Better to gamble on the future than lose on the present.
The worst is behind us, I believe. But the road forward is going to be long as the industry picks up the pieces.