The major forecasters see an oil supply surplus next year, but those bearish outlooks largely depend on the health of U.S. shale growth in 2020, an assumption that is looking increasingly fanciful.
Financial struggles are well-known, but the dominoes continue to fall. As Bloomberg reported, some drillers have recently seen their credit lines reduced, limiting their access to fresh capital. Twice a year in the spring and fall, banks reassess their credit lines to shale drillers, and decide how much they will authorize companies to borrow. This time around is expected to be the first time in roughly three years that lenders tighten up lending capacities.