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Tuesday, 24 January 2012

2012 Could Be a Disaster for Big Oil - DailyFinance

The past year has been a boon for exploration and production (E&P) companies, thanks to higher crude oil prices. Oil companies -- especially Big Oil -- were able to garner comparatively higher profits despite a general drop in production. However, things might not look as rosy in 2012.

Gloom on the horizon
The World Bank has come up with a bleak 2012 outlook for developing countries due to the European debt crisis. The bank warned that an escalation in the euro-area debt crisis could tilt the world into a recession on par with the financial meltdown three years ago. The bank goes on to outline the consequences on crude oil prices, and this might mean a reduction in margins for those E&P companies that booked greater profits by relying more on higher crude oil prices than production growth.