Oil market downturn turns heat on US shale producers

The downturn in the oil market is beginning to impact those who had a fair share in keeping it oversupplied and prices suppressed. The US shale oil producers are beginning to feel the pain of lower oil prices with large-scale increase in bankruptcies.

A few shale companies in the US had already gone bankrupt, with the possibility of a few more on the way.

According to a report by Motilal Oswal Institutional Equities, the total number of E&P (exploration and production) bankruptcies has risen to 20 so far, with the latest victim being Chesapeake Energy, one of the pioneers of the US shale industry, with a total debt of $9 billion.

It expected that the lower prevailing oil prices would result in write-down of $300 billion of global E&P assets.