Prospecting in the Oil Services Sector

Discussion in 'The Economy & Business Climate' started by Robert McMahon, Jan 17, 2016.

  1. Robert McMahon

    Robert McMahon Aegis Factors Lender / Support

    Messages:
    44
    Trophy Points:
    10
    Occupation:
    Factor
    If you are a broker prospecting in oil services, be aware the economics of the sector are collapsing rapidly and it will likely become very difficult to get account debtors approved in the very near future. Banks have already started reducing revolving lines of credit to the industry significantly and especially for those companies involved with shale. Factors will be watching credits in the sector very closely as it is clear that unless oil spikes back above $70, this sector is in for real devastation in 2016. Bankruptcy attorneys should do pretty well this year.
     
  2. Jennifer Cullen

    Jennifer Cullen Newbie IACFB Member

    Messages:
    4
    Trophy Points:
    0
    Occupation:
    (still figuring out what my title should be)
    Very true, but the collapse started over a year ago. And from the research I've done, it will be at least 2 more years before any rebounding happens. However, if you look at oil historically, it took the market 15-20 years to recover the last time this happened, so it's hard to predict the outlook since the circumstances are different each time. I've been going to college full-time for petroleum engineering. Taking a break to see if I can make a go of factoring instead.
     
  3. Robert McMahon

    Robert McMahon Aegis Factors Lender / Support

    Messages:
    44
    Trophy Points:
    10
    Occupation:
    Factor
    I have friend from Louisiana coming to visit this weekend and he is a petroleum engineer. I'm going to pick his brain a bit. From everything I'm reading, there's no recovery in site for this industry and literally black swans everywhere. There are a huge amount of bankruptcies on the horizon in this sector and layoffs are mounting up.
     

Share This Page