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NickB79

(20,399 posts)

12. If they lose too much, they'll stop drilling new fracking wells for the foreseeable future

Reply to dixiegrrrrl (Original post)

Fri Nov 28, 2014, 08:52 PM

Nov 2014

In the short term, these banks lose money and stop financing new drilling operations. In the medium term, low oil prices will really neuter the oil industry's future exploration and drilling programs.

End result if oil prices stay low for a year or so: expect oil and natural gas prices to SKYROCKET in a couple years as existing frack wells play out (they have a very rapid depletion rate compared to conventional oil and gas wells).

Sucks for us consumers who want cheaper fuel and home heating, but good for the environment to slow climate change.

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Banks and hedge funds losing big time by the dropping oil prices. [View all] dixiegrrrrl Nov 2014 OP

Gee, I wonder who will end up paying for the losses? louis-t Nov 2014 #1

Will we need to bail them out? Poor dears. Tierra_y_Libertad Nov 2014 #2

Only in America, kiddies - only in America - do taxpayers subsidize 1% profits. closeupready Nov 2014 #3

Actually, their plan is for us to bail them in. dixiegrrrrl Nov 2014 #5

Oh, yes! I remember voting for that! Well.....maybe not. Tierra_y_Libertad Nov 2014 #6

For the new fellow in the game, oh well, for those who have been there for a few years guess they Thinkingabout Nov 2014 #4

Do I not understand loans? hughee99 Nov 2014 #7

Banks loan $$$ and then sell the debt. dixiegrrrrl Nov 2014 #8

So it's quite possible that the loan itself is actually paid back in full, and the bank still hughee99 Nov 2014 #9

If the bank gambled, via derivatives, on the health of the oil company dixiegrrrrl Nov 2014 #10

so we'll probably have another bailout to clear out the savings in gas prices eh? NMDemDist2 Nov 2014 #11

If they lose too much, they'll stop drilling new fracking wells for the foreseeable future NickB79 Nov 2014 #12

I've been hoping the safeinOhio Nov 2014 #13

They will, they have a lot of oil related investments. dixiegrrrrl Nov 2014 #14