The Problem With Falling Oil Prices

Plummeting oil prices are affecting those who deal in bundles of loans to energy companies.Collateralised Loan Obligation managers are being forced to sell.We're seeing a lot of pressure on these businesses that have automatic sell programs.I believe we're at a technical level here that's being forced to be sold by the global markets,said Chad Brownstein,CEO of Rocky Mountain Resource Holding Inc.I clearly believe that a stable number for the energy industry is about 70.00 a barrel.*
The problem they're going to have is,the large offshore oil drillers are going to feel it.The real victims are the large drillers at a cost of 50.00 a barrel to produce.Oil services are going to get hurt,the technical levels and the prices of the debt that are attached to the major oil companies.Currencies of oil dependent countries such as Canada,Mexico and Norway are getting crushed,Mr.Brownstein pointed out.*
Sustained low prices could halt some drilling projects,postpone others,squeeze certain fracking operations and even lead to the loss of certain jobs within the energy sector,wrote contributor Kevin Mahn in the December 3 issue of Forbes magazine.The net long-term effect could actually become somewhat of a drag on US GDP if oil prices drop further and/or remain at those lower prices for an extended period of time.*
If credit dries up for energy companies,restaurant chains may suffer in oil-dependent states like Texas and California.Every major restaurant chain has high exposure in these states.*
Rocky Mountain Resource Holdings is a limited liability company that acquires and develops natural resource assets such as oil and gas reserves,agribusiness,energy infrastructure,and industrial minerals and chemicals.With offices in Los Angeles and Denver,it seeks to leverage its deep relationships in the industry to facilitate off-market acquisitions of private assets,including family-owned assets,in the midst of both asset and generational transitions,the company says.*
In Monday trading,WTI crude closed at 55.91 a barrel,down 2.14,or 3.70%;while Brent crude closed at 61.06 a barrel,down 1.83,or 2.96%.