August 3, 2020 Read More →

Pandemic accelerated but didn’t cause financial woes for oil industry

Kirkland Lake Voice:

The decline in oil demand accelerated by Covid-19 may be a sign of the future.

Forty publicly-traded U.S. oil producers wrote down a collective $48 billion worth of the value of their assets in the first quarter of 2020, the U.S. Energy Information Administration reported.

Quoting Deloitte, Oilprice.com points out that the collapse in crude oil prices, the economic slowdown and the crash in second-quarter demand could prompt U.S. shale drillers in aggregate to impair or write down the value of assets by as much as $300 billion. (All figures in U.S. dollars.)

“My big takeaway is that this is not just the result of the (COVID-19) virus: These are long-term, decade-old trends,” Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), told CNBC. The oil industry “is not going away tomorrow but it is a long-term decline that we are seeing.”

[Rashid Husain Syed]

More: Oil industry facing (c)rude awakening

Posted in: IEEFA In the News

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