The U.S. energy industry could face higher cost of capital to finance the ongoing boom or experience slower growth ahead.
Around two-thirds of U.S. oil producers failed to balance costs in the second quarter, despite crude oil prices rising above $70 per barrel, the Wall Street reports. 50 major U.S. oil companies revealed second-quarter results showing they spent $2 billion more than they brought in.
“While investors can play the short- and medium-term moves in the sector, remember that oil has been in a bull market for more than a year. Patient investors can use the iShares ETF for long-term investments, if they can tolerate the sometimes sharp pullbacks,” reports IBD.
For more information on the oil market, visit our oil category.