Here’s a number – 2,000. That’s how many donors we need this fall to stay on track. Can we count on you?
When oil prices fall, Big Oil has an advantage
Share Now on:
It’s not that big oil companies love low oil prices, but a part of them doesn’t mind. Companies like Shell, BP, ExxonMobil and Chevron — which report earnings over the next few days — aren’t just producers selling crude oil. They’re also refiners, buying crude and selling gasoline. When crude prices drop, that’s good for the refinery side of the business.
The big producers have another big advantage: long-term planning. “They’re always looking at least 10 to 20 years down the road, so they’re not a quarter-to-quarter type company,” says James Sweeney, a Stanford University professor who studies energy policy.
On the other hand, thousands of smaller producers borrowed money to finance their drilling. Low oil prices are likely putting some of them “in bankruptcy mode,” says David Bellman of All Energy Consulting.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.