by Steve St. Angelo, SRSRocco Report:
As the sell-off in the broader stock markets intensifies, it will be bad news for the world’s largest oil companies. Why? Because cracks are already beginning to appear in the biggest and most profitable global oil companies. While rising costs and higher debt levels have been plaguing the U.S. shale oil industry, these negative factors are now impacting the major oil companies as well.
When the oil price fell below $100 in 2014, it spelled doom for the U.S. and global oil industry. As oil prices continued to decline, energy companies were forced to increase their debt and reduce their capital expenditures (CAPEX). Cutting CAPEX spending while adding debt aren’t a good recipe for positive financial earning in the future.