Top Stories
Top Stories

Arnold: Half of US energy industry may go under

John Arnold, founder of Centaurus Advisors LLC.
Melissa Golden | Bloomberg | Getty Images

John Arnold, the legendary energy trader formerly of the hedge fund Centaurus Advisors, expects half of the U.S. energy industry to go bankrupt next year if the price of oil does not rebound.

Either way, bankruptcies among the industry will pick up as OPEC maintains production levels and as energy companies lose the ability to keep hedging against falling prices, he said.

Arnold first alluded to this prediction in a tweet Tuesday:

This account is not officially verified by Twitter, but a spokesperson for the Laura and John Arnold Foundation confirmed that it is operated by Arnold himself.

His prediction could have big implications for the U.S. equity and debt markets, which are already on edge about the potential for a large number of defaults in the junk bond space.

When contacted for this story the trader elaborated to CNBC Pro, saying in an email, "Wall Street largely understands the drop in revenue for 2016 for many companies, but I do not think Main Street does."

He went on: