From Reuters:
Dallas Federal Reserve Bank President Robert Kaplan said on Tuesday that while he expects more bankruptcies for oil and gas producers this year, he sees energy prices firming, along with prospects for jobs and investment.
“I wouldn’t be surprised to see firming prices in the period ahead,” Kaplan told reporters after an open forum with bankers and oil men in the heart of the oil-producing Permian Basin in West Texas.
“That doesn’t mean that 2016 is going to be an easy year … there are still going to be companies that are going to have to be restructured.”
The biggest U.S. energy price crash in decades has forced more than 60 North American oil and gas producers to seek protection from creditors since early 2015, including two this week.
Hundreds of drilling rigs have been idled in the Permian Basin since the price of crude dropped from its peak in mid-2014, pushing the basin’s rig count down to just 130 in April. But data from Baker Hughes and Drilling Info show several rigs have been added in the last two weeks alone.
And though debt-laden companies will still need to fold or find buyers, demand and supply in the global oil market will have about evened out by next year, Kaplan said.
