Three years after the price of crude began its rapid descent, the oil industry and investors are finally resigned to the idea of lower prices for longer, potentially ending a period of crisis for the sector.
The price of Brent crude, the international benchmark, is now down 59% since it hit a closing high of $115.06 a barrel three years ago on Monday. West Texas Intermediate, the U.S. gauge, is also 58% lower than the $107.26 high it hit a day later.
The steep fall sparked a slump in oil company profits, recessions from Russia to Venezuela and huge job cuts across the world’s oil fields.
But now, petrostates, investors and major oil companies are adapting to a world in which they see a range of $50 to $60 a barrel as the new equilibrium....
Since the start of 2015, in the U.S. 105 producers and 120 oil field service companies have filed for bankruptcy, according to Haynes and Boone, LLP. In a calmer environment, there might be one or two bankruptcies of note among oil and gas producers, and a few more among smaller services companies...
Excerpted from The Wall Street Journal. To read the full article, click here (subscription required).