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 Boone. 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).