• 6 hours Eldorado Sees Gold Production Soar In Second Quarte
  • 1 day Do Gold Stocks Still Have Upside Potential?
  • 2 days The S&P 500’s Top Companies Hold $2.5 Trillion In Debt
  • 2 days Electric Vehicle Rebound Bolsters Battery Metal Growth
  • 3 days BlackRock Makes A Run On Asian Stocks
  • 3 days Gold Prices Surge Above $1,800
  • 4 days Chinese Stocks Soar On Bullish Economic Data
  • 4 days Apple’s “Holy Grail Of Data” Leaves Energy Traders Disappointed
  • 4 days Gold Rally Adds $250 Billion To Top 50 Miners' Market Cap
  • 5 days TikTok Is Becoming A New Battleground For Tech Politics
  • 5 days Peru's Mining Industry Pummeled As Coronavirus Cases Surge
  • 5 days Why The World Is So Divided In Its COVID-19 Response
  • 6 days Equities Cheer Stellar Jobs Report, But It May Be Fleeting
  • 7 days Is Tech Billionaire Peter Thiel Done With Trump?
  • 7 days Musk Takes To Twitter To Troll The SEC
  • 8 days Lunar Mining May Commence As Early As 2025
  • 9 days Immigration Will Go Bust Without $1.2B Bailout
  • 9 days The Economics Of The Space Race
  • 10 days Why The World's Central Banks Aren't Yet Sold On Renewables
  • 11 days How Much More Cash Can Uber Burn?
The Origins Of Globalization

The Origins Of Globalization

The year 1000 marked the…

Capital Gain vs. Capital Consumption

Capital Gain vs. Capital Consumption

There is an important difference…

Europe On The Brink Of Economic Crisis

Europe On The Brink Of Economic Crisis

France, heartbeat of the European…

Oilprice.com

Oilprice.com

Writer, OilPrice.com

Information/Articles and Prices on a wide range of commodities: We have assembled a team of experienced writers to provide you with information on Crude Oil,…

Contact Author

  1. Home
  2. Markets
  3. Economy

A Recession Would Devastate The U.S. Oil Industry

Recession

The U.S.-China trade war and geopolitical flare-ups could threaten the growth of North America’s upstream oil and gas as oil market volatility and the specter of global recession rise, S&P Global Ratings said in a new report this week.

S&P Global Ratings’ report “North America: Rising Recession Risk Adds to Trade, Rate Uncertainty” found that American consumers have so far propped up the world’s biggest economy, but the trade disputes, heightened tension in the Middle East, and slowing global economic growth will weigh on many industrial sectors in the U.S., including the energy sector.

According to S&P Global Ratings, the risk of a recession in the United States beginning over the next 12 months has now increased to 30 percent-35 percent, up by five percentage points compared to the previous quarter.

Geopolitical tensions, especially in the Middle East with the attacks on Saudi oil infrastructure, and trade disputes “are leading to more frequent and intense periods of market volatility,” S&P Global Ratings says.

The rating agency has revised down its outlook on the U.S. upstream oil and gas industry from ‘stable’ in the second quarter to ‘stable-to-negative’ now. S&P Global Ratings’ outlook on the U.S. midstream oil and gas segment—including pipelines and refinery businesses—remains ‘stable’.

The U.S. shale production is indeed slowing down, according to the latest data from the U.S. Energy Information Administration (EIA). The most recent EIA data showed that American oil production fell sharply in July, dipping by 276,000 barrels per day. Moreover, shale producers are now facing financial stress and the prospect of stubbornly low prices.

According to a Moody’s report from June, North American exploration and production (E&P) companies will see their capital efficiency improvements stall this year and next as oil prices stay range-bound. Moody’s study of the 40 largest rated independent E&P companies in North America showed that companies are unlikely to significantly cut debt further because of the prospect of meager earnings and higher shareholder payouts.   

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment