MARKET COMMENT Why Contagion From Bad Oil Debt Can't Be Ruled Out

摘要

Widespread oil and gas bankruptcies and defaults may not trigger an event as catastrophic as the 2007-08 financial crisis, but the potential economic fallout from the sector's corporate carnage can't be discounted either. While most analysts believe problems will be contained within the oil sector, history shows that the implosion of a single industry can help trigger recessions, as the collapse of the US telecom business did in 2001-02 (EIF Nov.25'15). Furthermore, top energy and banking minds concede there is scant understanding of today's odd relationship between oil prices and financial markets, adding more uncertainty about potential spillover effects. Even if there's no contagion, the effects on the oil sector could be lasting and severe, as mounting losses may cause creditors to rethink financing the US oil sector so aggressively in the future.