While the low price of oil is providing some relief at the pumps this summer (and is likely to help some homeowners with their heating bills this winter), the implications of the current oil and gas surplus reach far beyond providing a little breathing room in the average monthly budget. Low prices mean smaller profits for the oil and gas companies, and for many investors this is translating to substantial investment losses.
Recent projections suggest that the oil and gas companies are bracing for a sustained downturn. Experts have been revising their forecasts downward for the past several months (and in some cases longer), and total investment in oil production is expected to drop by a staggering $1 trillion over the next four years. Due to slumping profits, many companies are delaying projects – if not cancelling them entirely – at land-based and offshore drilling facilities around the country and, for the most part, worldwide.
Oil and Gas Losses Continue Across Investment Classes
With capital investments on hold and profits continuing to flounder, the once-strong oil and gas market has now become a liability for many individual investors. Virtually all investment classes have been affected, including:
- Bank bonds linked to the price of oil
- Master limited partnerships (MLPs)
- Oil and gas company bonds
- Oil and gas company stocks
- Oil and gas funds
With the future of the oil and gas market uncertain, many individual investors are being told not to expect their portfolios to recover any time soon. Current market projections sustaining this pessimistic outlook include:
- An estimated reduction in oil production of seven billion barrels between 2016 and 2020
- An estimated $300 billion reduction in investment in oil exploration
- An estimated $370 billion reduction in total capital investment in 2016 and 2017
- Continued high levels of production and investment in Saudi Arabia and other oil-producing countries in the Middle East
These and other factors have resulted in all types of oil and gas investments becoming much more speculative than conventional wisdom supported in years past. Unfortunately, many brokers and brokerage firms that sold and recommended these investments failed to undertake the due diligence necessary to properly advise their clients of the market-related risks involved. Even more unfortunate, it is these brokers’ and firms’ clients – not the brokers and firms themselves – that are paying the price of their mistakes.
Have You Suffered Substantial Oil and Gas Investment Losses?
If you are an individual investor who has suffered oil, gas or other energy investment losses, the attorneys at Zamansky LLC are here to help. Our experienced legal team is actively representing investors nationwide who have experienced losses due to their brokers’ negligence, misconduct and fraud. Did you trust your broker or financial advisor? Did your broker or advisor let you down? Or, worse, did your broker or advisor intentionally mislead you into a risky investment? Our attorneys can assess your situation and take aggressive action to help you secure just compensation.
Schedule a Free Investment Loss Consultation at Zamansky LLC
Zamansky LLC is a leading investment loss law firm that represents clients in securities arbitration and other claims against their brokers and financial advisors nationwide. If you would like to speak with an attorney about oil and gas investment fraud, request a free consultation online or call (212) 742-1414 today.