Smaller energy industry? Just for a brief moment of shock. All the excess meat must be gotten rid of. All zombie companies must be culled. But guess what happens after? When healthier, better, more innovative companies take the market share that was held by the zombies, they also get the means to do the really big stuff. I know, it’s hard to imagine in the year of doom with COVID still pulling all economies down. But commodities will stage a comeback and it will be biblical. We want lean, mean companies to eat into that when it happens.
About $144 billion of energy bonds were trading at distressed levels in the middle of March, when the pandemic sent oil demand plunging, but that number receded to $37 billion by the end of November.