From Canada to Qatar and the Barents Sea to the Gulf of Mexico, energy companies are shelving or delaying projects following crude’s collapse. Some of the world’s biggest explorers have cut capital budgets from last year by as much as a third. In the U.S., the number of rigs drilling for oil plunged 60 percent since October to the lowest in almost five years. U.S. shale production started falling in May and the government expects the decline to continue.
…and feeling it in their stock prices
Investors are punishing U.S. drillers, and their stocks are missing out on the broader rally in U.S. equities. That makes it challenging for companies to continue raising the money they need to keep drilling. OPEC also has to watch its finances: Prices are too low for most member countries to break even, according to the International Monetary Fund and ING Bank NV. While Saudi Arabia, the biggest exporter, is burning through currency reserves, it still has $686 billion in store.
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