Oil industry analysts are warning of possible bankruptcies, especially if prices remain as low as they've fallen. Now, the Trump administration says it will help by buying up crude for the nation's strategic reserve.
A crew near Karnes City, Texas, continued work as oil prices collapsed this week. Companies already were cutting costs and now will have to cut deeper as oil prices remain low.A crew near Karnes City, Texas, continued work as oil prices collapsed this week. Companies already were cutting costs and now will have to cut deeper as oil prices remain low.Oil prices bounced back a bit after President Trump said the Department of Energy would buy crude for the nation's strategic petroleum reserve.
While oil prices increased nearly 5% after Friday's announcement, that was just a fraction of the amount they lost earlier in the week.collapse in crude oil prices"I actually have a little man camp and these guys are on the way out because they lost contracts," says Martinez, who has eight rooms he rents to out-of-town oilfield workers in Karnes City, Texas.
This is one small example of what declining oil prices mean for the rural communities that depend on the oil business. And there's a lot at stake for the U.S., the world's largest producer of crude oil. U.S. oil companies, especially smaller ones, are now looking to make deep cuts. Industry analysts warn of possible bankruptcies, especially if oil remains where it's fallen to, in the $30 per barrel range. Companies operating in Texas's Eagle Ford Shale need prices between $40 to $60 a barrel to remain profitable.Karnes City was transformed by the oil drilling boom that started about a decade back.
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