(FinancialHealth.net) – Oil companies have taken a hard hit over the past several months, with the economic impacts of COVID-19 leaving lasting fallout across the globe. According to MSN, this devastating crash has forced companies all across the globe to suspend work and/or abandon their drilling sites. Analysts believe this could seriously impact gas prices in the coming months.
COVID-19 has left our economy dangerously broken, but oil companies have been among those hardest hit. Quarantines and stay-at-home orders plummeted our demand for gasoline — and oil companies, which had already suffered serious blows from February’s stock market crash, have been struggling to recover.
The latest trends have some questioning Big Oil’s future:
So don't count the wrong chickens! | Oil Companies Will Be Bad Investments Within Five Years, Predicts Survey of European Fund Managers | RT @green401k: @gfriend @Betsy_Rosenberg Stranded asset comes home to roost? https://t.co/4a2Cqx0mCV TY @SharonKellyEsq FYI, @AlphaVerde
— Gil Friend (@gfriend) May 9, 2019
In late July 2020, Yahoo Finance reported that all the big oil companies were expected to file second quarter losses. While many have plenty of oil in supply, and some companies appear to be just breaking even, most are suffering from “stranded assets” as a result of growing restrictions on pipeline capacity. Low oil prices and green energy demands only serve to further this effect.
The reality is grim: oil companies are in serious trouble. And if they don’t find a way to turn around the trend, not all of them will survive. But what’s just as scary is the fact that most companies will eventually be forced to pass losses on to Americans — often in the form of massive price spikes. This is highly likely to occur when demand stabilizes.
Still, one certainty exists in this mess at the moment: now is probably not the time to be investing in oil stocks.
~Here’s to Your Financial Health!
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