By now, virtually all Texans know the short story of the recent boom and bust in oil prices.
The fuel for the “Texas miracle,” shale exploration and rising oil prices brought high returns for big energy companies – until those oil prices fell.
The pain isn’t limited to corporate boardrooms. Some mom and pop investors – everyday folks, lured by big promises tied to the oil boom – lost billions. Bernard Condon writes about this fallout for the Associated Press.
An investment tool called an oil partnership used to be a safe bet, because it was based on the storage and transport of, rather than the production of, oil. These new arrangements base investment on drilling, which is more volatile.
“This is a much more risky business,” Condon says. “If oil prices fall, you’re not making as much money. Since these partnerships give away much of their money to their investors – that leaves very little financial cushion. Billions were lost.”
What you’ll hear in this segment:
-How these “oil partnerships” meant many regular folks got involved in the recent boom and bust of oil prices
-One woman’s loss of a $200,000 investment in oil partnerships she bought through a mutual fund
-What legal options these investors have to recoup their money, and why we don’t know what is happening with those cases