Mike Blankenship Discusses What’s Next as Oil Prices Plunge into the Negatives

Oil prices dropped into negative territory earlier this week for the first time as the nation’s oil storage capacity neared its limit thanks to a historic coronavirus-induced demand slump. The COVID-19 pandemic has slashed demand for oil so much that U.S. storage capacity is filling to the brim.

Industry watchers say Monday’s price plunge foreshadows a bloodletting for scores of companies and will heap more pressure on state oil regulators to order drillers to curtail their production.

Winston & Strawn Houston Partner, Mike Blankenship recently spoke with Law360 about the impact that negative oil prices will have on drillers. “Expect a fresh wave of driller bankruptcies over the next few weeks,” said Mike. “They’re going to have no cash flow to service their debt, so they’re going to have to restructure. I think financial institutions are going to get spooked by this and force defaults under their credit agreements.”

Read more of Mike’s insights in this Law360 article here (subscription required).

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