Saudi Arabia held oil price at artificial low levels
- curbing Russian involvement in Syria
- Collateral damage:
small shale Oil companies
required USD$80/ barrel to breakeven operations
- [35 shale oil companies](https://marcellusdrilling.com/2015/11/list-of-36-oil-gas-companies-that-filed-for-bankruptcy-in-2015/) filed for chapter 11
- caught in precarious position of being over-leveraged and unprofitable for extensive periods of time
- Large oil companyBP
trading at close to Net Book Value for more than a year (2016-2017)
- price still recovering after 2 years (2018)
- Countries can hold an industry suppressed longer than impacted companies can stay liquid
- large cap companies will trade for extensive periods at close to net book value. Might be a good buy when markets turn around
- If industry is directly affected, cut losses and bail
Related
- [Devised strategy](http://garyteh.com/2018/04/trading-strategy-capitalizing-on-loss-aversion/) to avoid trading losses of this nature