The consultancy Wood Mackenzie has tallied how much U.S. oil producers are cutting back spending as the industry moves to crisis footing.
The big picture: What's already announced — from both independent producers and global giants like Chevron and BP — is eye-popping.
- And there's more to come as companies deal with prices at their lowest levels in two decades due to coronavirus crushing demand and the Saudi-Russia price war.
Driving the news: "22 U.S. independents have cut investment for 2020 by a total of US$20 billion, an average of 35%, and three by 50% or more," they write.
- Indeed, Devon Energy and Diamondback energy announced even further cuts this week.
Flashback: U.S. producers also cut back sharply when prices nosedived in the mid-2010s.
- Wood Mackenzie notes that this time the spending cuts so far have been similar, but have arrived faster — and more are expected.
- "[C]ompanies today are far leaner than back then; and what we’ve seen so far may just be a taste of what’s to come," they write.
- They note that multiple rounds of spending reductions already announced by some companies are a sign that "further, deeper cuts" are coming for many U.S. independent producers.