Economic Researcher Dr. Chris Martenson On Oil Prices: 'The Only Way It Can Stay Down Is If The World Economy Is Doing Very Poorly'

Economic Researcher and Peak Prosperity co-founder Dr. Chris Martenson told Benzinga because oil is priced below the marginal cost of production, a lot of companies are going to have a lot of trouble with the current prices. “They won't be able to continue to operate their drill programs because they won't have the revenue to support their part of the bargain,” Martenson said. The Peak Prospertiy co-founder explained the cost of capital is going up and these companies are borrowing money to drill wells. Many of the shale operators in the industry have had negative cash flows for the past few years, according to Martenson. He suggested spending more than $1 is capital to get $1 in revenue is okay for a little while, but not forever. “I don't think prices stay down here for long, because I don't think they can and I don't think the world economy is that weak,” Martenson said.