US Rig Counts

There was a lot of excited talk last week with the US Rig Counts actually went up. A lot of people we speculating that a continued $50 per barrel price will get the fracking industry back on track. That unfortunately just won't happen. And for one very important reason. Capital. There is none. Over the past year dozens of companies have filed for bankrupcy, and those losses have totaled some fifty billion dollars. The few companies still in operation are just barely scraping by. No one has the money to do any new drilling. In the past that has not been an issue. They banks were financing any new operation, and that worked out great for them when oil was north of $100 a barrel. That is just nor the case anymore. After a year and a half of being burned by the industry, banks have become gun shy. They are a lot less likely to open their pockets and fork out a pile of cash up front on endeavors as risky as oil.