These Energy Stocks Lost Investors Billions in 2020
The S&P 500 index is up 14.2% year to date and the Nasdaq Composite has climbed 41.8% over the same timeframe, but not every industry has thrived in this difficult year. Companies in the energy sector have struggled following the collapse of oil prices in February. Though crude oil has somewhat rebounded, the average barrel is still cheaper than it has been in years. This has caused some issues that ripple through various industries and energy subsectors.
Exploration and production companies generate fewer dollars for every barrel pumped and sold, but the operating expenses and capital investment required the generate those volumes remain the same. This creates a squeeze for equipment suppliers, refiners, and transportation and pipeline companies. With profits threatened across the industry, fewer lenders are willing to provide capital, which drives the cost of capital higher for the energy sector, further eating into profits.
As a result, investors have lost interest in energy sector stocks, sending prices downward and wiping out billions in equity value. Here are some of the companies getting hit as a result.
Source Fool.com
