The oilpocalypse retain . The industry has been in a tailspin since the coronavirus lockdown drive demand into the ground . Fossil fuel companies have throw together to reckon out what to do , and it seems the latest manoeuvre is not make up loanword .
On Tuesday , Wells Fargo posted a quarterly loss for the first meter since 2008 , which is n’t exactly a comparability that inspires confidence . Within itsreport on the 2d poop , Wells Fargo take note that the oil and gas industry is in particular worry . Despite make up 3 % of its loan portfolio , 47 % of the 2nd quarter derelict corporate loan were tied up with oil and gas companies .
All tell , the industriousness is past due on $ 1.4 billion , and the Wells Fargo report projects it could get worse . The report also helpfully points out that $ 3.9 billion in oil and gasoline loanword are “ criticise , ” which is bankspeak for loans that are in peril of not being repaid . Keep in mind , this is only one bank , but thing are n’t looking too dandy elsewhere .
Flames from the Maria fire burn through an oil field in Santa Paula, California late on 14 December 2024.Photo: Josh Edelson/AFP (Getty Images)
JPMorgan saw its tax revenue decrease 70 % in the first quarter this year , in part due to dim oil prices . Oil and gas pedal companies are alsowriting downtheir assetsbecause they simply ca n’t do the affair they do , namely draw out dead dinosaur goop out of the flat coat . The heavy problem is nobody wants their oil , and prices are in tough shape .
Afterbriefly go negativeearlier this year , the price of crude has spring a flake . Just not to layer needed to make oil production profitable . The Kansas City Federal Reserve Bank saw petroleum production dip sharply last twenty-five percent in the region it looks after as well . That region covers a huge swath of the Midwest and Southern Plains , including all of Oklahoma , one of the epicenters of the fracking boom . party included inits surveysaid they would need oil to get up to $ 51 per barrel to be profitable . That ’s not really fall out , though , with oil campedaround $ 40 per cask . That means more company are at risk of default on loan or position off workers to cut price , something evenmassive company like BP are doing . Or both .
It also raises the chances that we could in fact see banks get in the oil business themselves , taking over the fossil fuel companies that default . Wells Fargo was among a group of large banksscheming to do just thatin April . It feel like a life ago , but the vista of bank - have oil and gas company is now a respectable bit closer to the view .
I ’m all for collective action when it ’s masses against tyrannical systems . But I have to be true , I ’m not really certain how I sense about this one . It ’s the contrary of whatever ask someone to choose their favorite pup is . On the one hand , fogy fuel troupe have engaged in a campaign of illusion and delay and fund politicians to do their bidding . On the other manus , banks . I have in mind , whatelseistheretosay ?
Whatever do next , it ’s empty the current environment is unsustainable ( even aside from the whole oil and gas pedal industry show in a climate catastrophe ) . rock oil and gas , in particular producing it through fracking , hasnever been a great investment funds . Now , the risk is rising for companies to default on on loans , go bankrupt , and otherwise fuddle a wrench into the fiscal organisation as well as humankind energy market . If onlythere was some waytotransition the world awayfrom these severe investments and alsostave off the death of lifeas we know it .
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