oil credit

http://www.zerohedge.com/news/2015-12-30/new-cartel-running-oil-sector

Hedge Funds. Non Bank entities. Energy Lending Foreign Banks operating in the US ? Just cant imagine the derivatives tied to $ 4 trillion in underlying. Temptation for the big throbbing brains difficult to resist

As oil prices wallow near multi-year lows, it’s becoming increasingly clear that the new cartel controlling oil prices is not OPEC but world credit markets. From Saudi Arabia’s record $100 billion deficit to shale oil’s continuing reliance on cheap credit funding, it’s clear that no major oil producer or company in the world right now is economically self-sufficient based on oil revenues alone. This situation has left the flow of oil and the decision on when to stop pumping the increasingly tarnished black gold in the hands of banks rather than oil men.

Some big banks have acted preemptively to dispel investor concerns over the size of their loans to banks. According to third quarter data, Citigroup holds $22 billion in energy loans compared to a total loan portfolio at the bank of $632 billion. JP Morgan Chase holds $44 billion in energy loans against a portfolio of $791 billion in total loans. Bank of America has $22 billion in oil & gas loans against a total portfolio of $886 billion in loans. Wells Fargo has $17 billion in oil & gas loans against a total portfolio of $888 billion.

The total amount of loans outstanding to the energy sector is a little under $4 trillion,so these banks make up only a small 3 percent of the total outstanding loan market. In fact, U.S. banks are currently only holding about 45 percent of the total U.S. loans to energy companies, with around 30 percent held by foreign banks operating in the U.S., and 25 percent held by non-bank entities like hedge funds.