With oil prices at a five-year low, down 20% since July, many oil companies are reducing costs. For example, ConocoPhillips will decrease by 20% its 2015 investment spending, and BP plans cuts to jobs over the next several months. However, ConocoPhillips expects its gas and oil production to increase by over 3% next year due to major new global projects and more productive wells in US shale fields. Increased production may prompt further price drops, with some analysts predicting oil below $50 a barrel in 2015. Globally, many companies are reducing investments, especially in offshore and shale fields. Examples include Norway’s Statoil canceling contracts and planning job cuts and Canada’s Precision Drilling reducing its 2015 capital spending 44%. Raymond James projects the number of US rigs to drop nearly 30% by mid-2016. Often tied to oil prices, some natural gas projects in Canada and the US might be at risk due to the fall in oil prices and an expected increase in natural gas supplies between 2015 and 2019.

Source: The New York Times