[Regarding natural gas prices:] “Going into summer, producers know it’s going to be a massacre.”
Sami Yahya, a Platts Bentek analyst.
“Global demand and supply will balance very quickly because we’re seeing an extended decline from producing fields.”
Per Magnus Nysveen, Rystad’s head of analysis, saying the world oil market will re-balance this year.
“It could be a lot of years before you see any meaningful rebound in the dividend [of oil companies]. It’s tough to have a really conservative, stable investment in a business that can’t control the price of its own product.”
Josh Peters, editor of Morningstar Inc.’s DividendInvestor newsletter
“I’ve covered this industry since the late 70s and I would have to say I haven’t seen a situation like this, of this magnitude. We’ve concluded that this is not a normal cyclical downturn.”
Carol Cowan, a Moody’s senior analyst
“Shale was a hot growth area and companies made the mistake of borrowing too much. It’s amazing that so many people were willing to lend them money. Many are going to file for bankruptcy, and bondholders and equity are going to get wiped out en masse.”
George Schultze, founder and chief investment officer of Schultze Asset Management in New York
About Latin America: “The 70 percent drop in prices is a major shock. Oil was contributing in some countries from 20 to 50 per cent government revenues and 50 to 96 percent of exports. No wonder we are starting to question the financial viability of some countries and some national oil companies.”
Luisa Palacios, head of Latin America at Medley Global Advisors, a risk consultancy
“The problem is going to be the money. Where is the money going to come from? A lot of people who have burned their fingers on (U.S. shale) are going to be reluctant to reinvest.”
Arnaud Breuillac, president of exploration and production at French oil giant Total.
About the proposed production freeze announced last week by Russia, Saudi Arabia, Qatar and Venezuela: “The four producers involved are already producing close to their peak. The freeze is the oil-market equivalent of calling for a cease-fire when they’re running out of ammo.”
Miswin Mahesh, an analyst at Barclays Plc in London
Due to the oil price crash and the industry’s crushing debt load, “The oil industry will be permanently damaged.”
Steven H. Pruett, CEO of Elevation Resources, an oil company based in Midland (TX)
“I never thought I would wish, let alone pray, for higher oil prices, but I am. The world badly needs higher oil prices.”
Han de Jong, chief economist at ABN Amro Bank NV in Amsterdam
“The fact that some oil is being sold at $10 per barrel – like some Canadian and Venezuelan crude grades – shows that the strain on producers has rarely been so big. At this level, some producers are not covering capital and operating expenses. And costs are even higher to shut down production. These prices will serve as destabilizing factors in many producing countries and on many bank loans.”
Marco Dunand founder and CEO of trading house Mercuria
“The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up. Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief. It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something. The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly. Debt jubilees have been going on for 5,000 years, as far back as the Sumerians.”
William White, chairman, OECD’s review committee; former chief economist, Bank for International Settlements
“So much of the frenzy in shale in the past few years was a result of the money pouring out of Wall Street. It was as much a Wall Street play as it was an oil-and-gas play. It was putting money to work. Companies took on all that risk and now we see the result [–bankruptcies].”
Terry Clark, White Marlin Oil & Gas Co.
