Major Banks Brace For Losses On Bad Energy Loans
Exploring for oil and gas is costly.
Wall Street is about to take a substantial hit from bad loans to the energy sector. Plummeting oil prices drove 42 North American oil companies to file for bankruptcy in 2015, according to a CNN report.
JP Morgan Chase is reportedly setting aside 124 million dollars to offset losses on bad loans to oil & gas companies. That figure could balloon to 750 million, should oil prices stay this low for another 18 months. Citigroup is anticipating losses of more than 300 million. Wells Fargo holds 17 billion in loans to the energy sector, and is setting aside 1.2 billion to cover losses.
Meanwhile, here in South Louisiana, we're watching friends and neighbors lose their jobs. I guess cheap gas isn't so great after all.