Oil Firms’ Rising Debts Add Downward Price Pressure in BIS View
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The oil and gas industry’s $2.5 trillion of debt may compound the drop in crude prices, as companies maximize output to meet their financial obligations, according to the Bank for International Settlements.
Debts owed by energy firms have more than doubled since 2006, the Basel, Switzerland-based institution said in a report on Wednesday, following similar comments last month. The need to repay those loans may keep global markets oversupplied by spurring companies to produce as much oil as possible and sell futures contracts that protect against slumping prices.