Banks including Barclays and Wells Fargo are facing potentially heavy losses on an $850 million (€680m) loan made to two oil and gas companies in a sign of how the dramatic slide in the price of oil is beginning to reverberate through the wider economy.
Details of the loan emerged as delegates of Opec, the oil producers' cartel, gathered in Vienna to address the growing glut in the supply of oil.
Several Opec members have been calling for a production cut to shore up prices, but Saudi Arabia, Opec’s leader and largest producer, signalled that it would not push for a big change in the group’s output targets.
Repercussions from the decline in the price of crude, which has dropped 30 per cent since June, are spreading beyond the energy sector, hitting currencies, national budgets and energy firm shares.
The price slide is having a serious impact on oil producers that rely on revenues from crude exports to balance their budgets. The Russian rouble has lost 27 per cent of its value since mid-June, while the Norwegian krone is down 12 per cent. – Copyright The Financial Times Limited 2014
