Oil price crash is making big oil companies slash spending – Yahoo Finance, Yahoo.com

aftermath of the Saudi Arabia driven crash in oil prices Monday on producers and drillers is now starting to appear. And it’s looking damn ugly. ” data-reactid=” (type=”text”> The aftermath of the Saudi Arabia driven crash in oil prices Monday on producers and drillers is now starting to appear. And it’s looking damn ugly.

coronavirus outbreak triggering conference and concert cancellations globally, the bankers at Goldman Sachs have managed to stay the course on hosting oil companies in Houston this week. The conference is comprised of oil service, energy and production, oil majors, refining companies and mid-stream players. Word out of the conference is that capital spending spending budgets will be slashed big-time as oil companies try to cut costs and replan for a future of much lower oil prices. ” data-reactid=” “type=” text “> Despite the coronavirus outbreak triggering conference and concert cancellations globally, the bankers at Goldman Sachs have managed to stay the course on hosting oil companies in Houston this week. The conference is comprised of oil service, energy and production, oil majors, refining companies and mid-stream players. Word out of the conference is that capital spending spending budgets will be slashed big-time as oil companies try to cut costs and replan for a future of much lower oil prices.

Goldman Sachs analyst Angie Sedita notes US energy and production companies attending see cutting capex by (% to) (% in) . Meanwhile, oil service companies have called out (% to) % in capex cuts this year, as well as plans to swiftly reduce headcount.

A Halliburton facility in Port Fourchon, Louisiana (Photo credit should read MIRA OBERMAN / AFP via Getty Images) Most of the companies in attendance have vowed to defend their dividends . Obviously that is not the case at Occidental Petroleum. The oil company – still reeling from an ill-timed $ billion takeover of Anadarko in – slashed its dividend for the first time in years on Tuesday by nearly (%.)

Not all is doom and gloom at the conference, though it’s hard to find anything positive with the entire space being hammered. “The upside is that many of the companies believed that while a difficult road ahead in , the consequence would be: a) a more swiftly correcting oil market with US production declines in (estimated to be) – 800 k bbls / d (vs growth), and b) a healthier industry with the potential exit of weaker players, consolidation, and more rapid attrition / scale reduction, ”says Sedita.

A minor win, very minor. (Oil prices dropped by more than

oil prices plunging to below $ a barrel . ” data-reactid=” “type=” text “> For its part, Goldman does not rule out (oil prices plunging to below $ (a barrel

) “The prognosis for the oil market is even more dire than in November , when such a price war last started, as it comes to a head with the significant collapse in oil demand due to the coronavirus. This is the equivalent of a 1Q 18 demand shock amid a 2Q (OPEC production surge for a likely 1Q) price outcome. As a result, we are cutting our 2Q and 3Q Brent price forecasts to $ 35 / bbl with possible dips in prices to operational stress levels and well-head cash costs near $ / bbl, ”Goldman Sachs oil strategist Damien Courvalin said earlier in the week.

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