There is another longer-term problem looming on the horizon for oil companies, according to Citigroup: pensions.
In a note out Monday, Tobias M. Levkovich and his team took a look at pension pressure in the US.
To recap, there was a $376.6 billion shortfall between pension fund assets and pension obligations in corporate America in 2015. That is down slightly from 2014, but the gap still represents a significant problem.
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Here is Citigroup (emphasis added):
"Pension under-funding continues to be a major issue for S&P 500 constituents as very respectable equity market gains over the last seven years have not substantially alleviated pension pressures. The S&P 500 has appreciated by more than 200% at the end of 2015 since the low in March 2009 but the aggregate underfunded status of $376 billion in December 2015 is now 22% higher than the $308 billion under-funding peak seen in December 2008."
Here is a chart showing the breakdown over time:
The bad news for the energy sector, and energy workers, is that it is mostly capital-intensive companies with defined benefits programs that dominate the list of underfunded companies. Here is Citigroup again:
"All ten S&P 500 sectors remain underfunded, with Energy continuing to be the least funded sector. As the overall S&P 500 pension funding status ticked up slightly, it is worth noting that only 30 companies within the S&P 500 were fully funded at year-end 2015, with nearly half of the overfunded companies coming from the Financials sector."