by Mish Shedlock, The Maven:
WTI Survey Price Expectations
- 6 Months: $33
- 1 Year: $42
- 2 Years: $50
- 5 Years: $58
61 percent of firms would remain solvent in the next year if the WTI price of oil would stay at $30 per barrel, and 64 percent of firms would remain solvent if the WTI price of oil would stay at $40.
Price data in the above table from MarketWatch.
If those prices hold, the survey estimates about 39% of the oil producers will go bankrupt.
Even at $40, 36% of the firms would go bankrupt.
Oil Crash Resumes: When Does It Stop?
Earlier today I asked Oil Crash Resumes: When Does It Stop?
When Does the Crash Stop?
- When producers stop drilling oil that is not needed.
- When the speculators putting on “paper oil” trades get wiped out.
Oil is another example of leveraged trades. Even more so than gold, speculators will not take delivery.