Energy Lenders Take Cue from Animated Classic
(The views and opinions expressed in this article are those of the attributed sources and do not necessarily reflect the position of Rigzone or the author.)
In the context of the oil market, banks are doing something immortalized in song by Jiminy Cricket in the classic Disney animated film “Pinocchio.” So says one of Rigzone’s regular market-watchers. Keep reading for his perspective in this week’s installment of what to watch in the oil market.
Tom McNulty, Houston-based Principal and Energy Practice leader with Valuescope, Inc.: Lots of cans were kicked down the road in March, when borrowing bases were redetermined for upstream borrowers. It is now September, and time for another redetermination phase. Banks hoping for commodity prices to save their loan portfolios are wishing upon a star. Oil prices are trading in a reasonable range for current supply/demand economics. We should see more and more bankruptcies between now and the end of this year.
Andrew Goldstein, President, Atlas Commodities LLC: Although gasoline inventories have fallen in recent weeks, they still remain over the five-year seasonal average. With Labor Day approaching, ending a sluggish driving season, I would look for gasoline prices to fall to pre-Memorial Day lows.
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