| The coronavirus pandemic was the final nail in the coffin for some oil companies. Before COVID, the only thing keeping many of these companies in business was low interest rates and cheap loans.
According to the Institute for Energy Economics and Financial Analysis, most of the top drilling companies were actually losing money — before the pandemic. Out of the top 40, only four had positive cash flow in the first quarter of 2019.
In fact, more than 200 drilling companies have gone bankrupt over the past five years alone. Many of the survivors kept pumping oil to make their loan payments and try to live to fight another day.
But then came the pandemic... and oil prices cratered — literally below zero — as demand plunged. Twenty more U.S. drilling companies have declared bankruptcy, with Chesapeake Energy being the most notable.
Chesapeake is a pioneer in shale drilling and was once one of the industry's largest firms. It filed for bankruptcy protections in June with more than $9 billion in debt.
Deloitte, a consulting firm, expects yet another wave of bankruptcies as drilling companies will look to write off more than $300 billion in bad debts.
So why should anyone be bullish for oil now? And what does any of this have to do with inflation? | 
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