Spending Cuts, Job Losses Put US Oil Production Increases at Risk
Thousands of workers in the American oil industry have lost their jobs as the industry works to reduce its expenditure due to dropping oil prices. This comes as OPEC and its allies strive to increase production to grow their market share which was previously lost to the U.S. and other producers in the last couple of years. Just last week, OPEC+ agreed to increase production from next month by 137,000 barrels daily.
These increases have negatively affected global oil prices, which have dropped by roughly 12% thus far into the year. Experts believe that a drop or plateau in America’s oil output would greatly decrease the country’s influence in international markets, while calling into question Trump’s push for energy dominance.
Last week, ConocoPhillips announced that it would lay off 25% of its workforce. The company is the 3rd biggest producer of oil in America, Earlier in February, Chevron also announced that it plans to cut its workforce by about 20% in the next 12 months as it works to raise profits and reduce costs. A similar announcement was also made by Schlumberger Limited, an oilfield service firm, which explained that they were focused on cost saving.
In total, rising costs and dropping oil prices have prompted more than 20 producers of oil in the U.S. to reduce their capital expenditures, among them Halliburton, Diamondback Energy, and Occidental Petroleum Corp.
Data shows that America’s oil rig count has dropped to 414 since the year began. The Permian Basin, the country’s most prolific oilfield, has seen its activity reduce as more firms scale back their investments. Latigo Petroleum’s president Kirk Edwards explains that for rigs to resume operations, oil prices must remain steady around $70-$75 a barrel. Latest figures show that West Texas Intermediate futures were at $62.15 at the start of this week.
Analysts project a significant drop in oil production in America, with Energy Aspects expecting onshore production to reduce by 300,000 barrels per day this year. In a note, analysts Paola Romero and Jesse Jones explained that moderate growth of oil output will decelerate further as exploration and drilling activity levels off, with operators prioritizing stricter capital management and efficiency.
It doesn’t help either that President Trump’s tariffs and trade policies have elevated costs of key supplies such as casings and steel. Diamondback anticipates the cost of steel casing to rise by roughly 25% this year as tariffs take hold, pushing up the breakeven cost of virtually every well drilled in America in 2025.
It would be interesting to hear how entities like GEMXX Corp. (OTC: GEMZ) that conduct their oil and gas exploration activities in Latin America are faring under the current market conditions.
NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
Thousands of workers in the American oil industry have lost their jobs as the industry works to reduce its expenditure due to dropping oil prices. This comes as OPEC and its allies strive to increase production to grow their market share which was previously lost to the U.S. and other producers in the last couple of years. Just last week, OPEC+ agreed to increase production from next month by 137,000 barrels daily.
These increases have negatively affected global oil prices, which have dropped by roughly 12% thus far into the year. Experts believe that a drop or plateau in America’s oil output would greatly decrease the country’s influence in international markets, while calling into question Trump’s push for energy dominance.
Last week, ConocoPhillips announced that it would lay off 25% of its workforce. The company is the 3rd biggest producer of oil in America, Earlier in February, Chevron also announced that it plans to cut its workforce by about 20% in the next 12 months as it works to raise profits and reduce costs. A similar announcement was also made by Schlumberger Limited, an oilfield service firm, which explained that they were focused on cost saving.
In total, rising costs and dropping oil prices have prompted more than 20 producers of oil in the U.S. to reduce their capital expenditures, among them Halliburton, Diamondback Energy, and Occidental Petroleum Corp.
Data shows that America’s oil rig count has dropped to 414 since the year began. The Permian Basin, the country’s most prolific oilfield, has seen its activity reduce as more firms scale back their investments. Latigo Petroleum’s president Kirk Edwards explains that for rigs to resume operations, oil prices must remain steady around $70-$75 a barrel. Latest figures show that West Texas Intermediate futures were at $62.15 at the start of this week.
Analysts project a significant drop in oil production in America, with Energy Aspects expecting onshore production to reduce by 300,000 barrels per day this year. In a note, analysts Paola Romero and Jesse Jones explained that moderate growth of oil output will decelerate further as exploration and drilling activity levels off, with operators prioritizing stricter capital management and efficiency.
It doesn’t help either that President Trump’s tariffs and trade policies have elevated costs of key supplies such as casings and steel. Diamondback anticipates the cost of steel casing to rise by roughly 25% this year as tariffs take hold, pushing up the breakeven cost of virtually every well drilled in America in 2025.
It would be interesting to hear how entities like GEMXX Corp. (OTC: GEMZ) that conduct their oil and gas exploration activities in Latin America are faring under the current market conditions.
NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
