Bloomberg News reports that after rebounding to $61 a barrel in June, crude prices tumbled 24% in the third quarter.
JPMorgan Chase said Tuesday that it increased its loan loss reserves for oil and gas by $160 million in the third quarter. Bank of America’s at-risk loans increased 15% from a year ago due to the deteriorating finances of some of its oil and gas borrowers. And Wells Fargo & Co. reported that it reserved additional cash to cover potential losses in the energy sector.
The financial industry has so far avoided the kind of damage that triggered the collapse of hundreds of energy lenders in the 1980s. Banks are in the middle of the second round of twice-yearly reassessments of oil and gas credit lines.
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