7/7/2017

ECONOMY/OIL: “Easy Wall Street cash is leading American shale companies to expand drilling even as most lose money on every barrel of oil they bring to the surface.
While crude prices have fallen 13% since April, U.S. oil drillers have put about 100 rigs back to work from Oklahoma to North Dakota.
Wall Street has injected $57 billion into the sector over the last 18 months in the form of high-yield debt and stock sales. The money has proved to be a lifeline for stronger operators, virtually all of whom launched new drilling campaigns at the start of 2017 in the hope that oil prices would rebound.
But the new wave of crude has again glutted the market, pushing prices to around $45 a barrel. The shale companies are edged even further from profitability, and a few voices have begun to question whether they should be cut off.”

-Bradley Olson and Alison Sider, “Wall Street Cash Pumps Up Oil Production Even as Prices Sag,” The Wall Street Journal online, July 7, 2017 05:30am