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Data: FactSet; Chart: Axios Visuals

Crude oil is languishing in the "friend zone," and that's not enough for substantial swaths of the ailing sector.

The state of play: U.S. prices have hung out in the roughly $40-per-barrel range (and sometimes lower) for the last month after sharply recovering from the depths of April's price and demand collapse.

Why it matters: "I don’t think that $40 oil is enough to turn around the shale industry," oil analyst Andy Lipow tells the Wall Street Journal.

  • "This price is still not enough to cover all the debt and costs that have been incurred during the boom," he said.

Threat level: There's other evidence that $40-per-barrel doesn't cut it for a number of oil-and-gas companies.

  • An April Kansas City Fed survey of companies in their region found that roughly one-third said they do not expect to remain solvent at $40, even if prices stay there for less than a year.
  • On the brighter side, a Dallas Fed survey in June of companies in their area, which includes Texas, found that the vast majority expect to remain solvent for the next year.
  • However, a number of U.S. companies have already declared bankruptcy during the current crisis.

Where it stands: This morning, Brent crude was trading around $42.92 and WTI at roughly $40.40.

  • The worsening spread of COVID-19 in the U.S. is creating headwinds even as output cuts domestically and worldwide have succeeded in tightening the market.
  • "Over the last few weeks, traders have put more weight on how supply evolves, but from now everyone’s eyes are on demand again and how COVID-19 expands in the U.S.," Rystad Energy analyst said in a note Tuesday.

Yes, but: While low prices jeopardize some companies, Bloomberg reports the shale industry is getting more than $2.4 billion in loans from the federal Paycheck Protection Program.

Go deeper

Ben Geman, author of Generate
Oct 14, 2020 - Energy & Environment

The oil industry faces a long-term reckoning

Data: IEA; Chart: Sara Wise/Axios

The International Energy Agency's very long-term outlook released Tuesday offers useful analyses about the cloudy future of the industry and petro-states.

Why it matters: The pandemic's long-term effects and the prospect of future climate policies are together causing a rethink of the sector's financial future.

Trump's coronavirus adviser Scott Atlas resigns

Photo: Nicholas Kamm/AFP via Getty

Scott Atlas, a controversial member of the White House coronavirus task force, handed in his resignation on Monday, according to three administration officials who discussed Atlas' resignation with Axios.

Why it matters: President Trump brought in Atlas as a counterpoint to NIAID director Anthony Fauci, whose warnings about the pandemic were dismissed by the Trump administration. With Trump now fixated on election fraud conspiracy theories, Atlas' detail comes to a natural end.

Dave Lawler, author of World
2 hours ago - World

Assassination in Iran sets stage for tense final 50 days of Trump

The funeral ceremony in Tehran. Photo: Iranian Defense Ministry via Getty

Iranian leaders are weighing their response to the assassination of Mohsen Fakhrizadeh, known as the father of Iran’s military nuclear program, who was given a state funeral Monday in Tehran.

The big picture: Iran has accused Israel of carrying out Friday’s attack, but senior leaders have suggested that they’ll choose patience over an immediate escalation that could play into the hands of the Israelis and the outgoing Trump administration.