• 4 minutes 5 Tweets That Change The World?
  • 7 minutes Trump Tariffs NOT China's Biggest concern. Chinese Shadow Banking Bigger. What is Shadow Banking You Ask ?
  • 11 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 15 minutes Glory to Hong Kong
  • 2 hours PETROLEUM for humanity 
  • 1 hour Any difference btw Hunter Biden on BOD of Ukraine Company vs. Qatar bailout of Kushner Real Estate 666 Fifth Ave ?
  • 1 hour Total SA In Expansion: $600 million For India's Adani Gas
  • 2 hours China's Blueprint For Global Power
  • 35 mins HK. Out. Now.
  • 14 hours National Geographic Warns Billions Face Shortages Of Food And Clean Water Over Next 30 Years
  • 11 hours Trump will capitulate on the trade war
  • 3 hours How The US Quietly Lost The 1st Amendment
  • 16 hours Crazy Stories From Round The World
  • 2 hours Who's Afraid Of Whom? - American Politics I
  • 14 hours DING DING DING DING DING DING DING DING DING DING DING DING DING DING DING DING DING
  • 15 hours Strategic beauty of attack on Iranian tanker
  • 1 hour Impeachment and Foreign Conflicts in USA Politics
  • 1 hour American Politics II - The Political Implosion / America At War With Itself
Alt Text

How Much Energy Would It Take To Travel Through Time?

Time travel has always fascinated…

Alt Text

Oil Markets On Edge As Tensions Mount In The Middle East

The Turkish invasion of northern…

Alt Text

Alberta Plans Oil Offensive, Starts ''Energy War Room''

Alberta’s government is moving to…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Premium Content

Wells Fargo Reduces 66% of Credit Lines to Oil and Gas Players

Around 66 percent of Wells Fargo’s credit lines to energy exploration and production companies have been reduced as a result of the two-year drop in oil prices, The Street reported.

The E&P loans make up more than half of the San Francisco-based bank’s US$17.8 billion in loans to oil and gas ventures. Just under half of the outstanding loans have been vetted so far, according to a presentation by CFO John Shrewsberry on Tuesday.

Major American banks that have offered credit lines to oil and gas companies have seen their stock prices drop as investors become nervous that the debtors would default from price pressures. Not a mad thought as the debt to EBITDA ratio of many distressed U.S. oil drillers is topping 7.0

Shrewsberry said Wells Fargo’s total oil and gas portfolio, including credit lines that have not been used yet, equals US$40.7 billion dollars. Less than a quarter of the serviced borrowers were from investment grade companies, the CFO added. Related: OPEC Head Calls for $65 Oil

Image courtesy: Motley Fool

Related: Mozambique’s LNG Dreams Falling Apart

However, U.S. banks have something to look forward to this summer as The Federal Reserve Bank has hinted at a potential interest rate hike in June, which could play in favor to Wells Fargo. The Fed’s interest rates have been near zero for nearly seven years.

In the fourth quarter of last year, the Fed had said it might increase interest rates four times this year. But, after the oil price drop again earlier this year, it revised its forecast.

"The prospect for higher rates…helps widen the spread between what banks charge on loans and what they charge on deposits, thus lifting margins and boosting earnings power," Jim Cramer, the owner of the charitable trust that holds Wells Fargo, said.

By Zainab Calcuttawala for Oiprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play