It is undeniable that the effects of low oil prices influenced by the COVID-19 epidemic are becoming a burden for some of the US energy giants.
|ExxonMobil is considered a float to bail out the US economy.|
Oilprice reported that US energy giant ExxonMobil has begun to reduce production rates at its second-largest refinery after witnessing a continuous decline in energy demand that filled tanks.
On March 23, ExxonMobil announced that it had to reduce the production rate of its Baton Rouge plant in Louisiana, from 502,500 bpd to 440,000 bpd. Along with that, the number of contract workers has decreased to 1,800 while the number of employees working at this facility is 2,000.
The Baton Rouge Refinery is Exxon’s second largest refinery and the second largest oil refinery in Louisiana. Cutting production rates at this plant can visualize the impact of low oil prices and how market demand affects small energy industry producers in the United States.
Last week, statistics from energy services firm Baker Hughes showed that US energy companies had cut the most powerful oil rigs in a week in almost a year – mainly in the Permian basin, a large oil field. most of this country.
Oil rigs cut 19 rigs in the week to March 20, the sharpest decline since April 2019, bringing the total number of rigs to 664, the lowest since January 2020.
The number of oil rigs an early indicator of future output fell 19% from the same week a year before there were 824 rigs in operation. More than half of all US oil rigs are located in the Permian basin of West Texas and eastern New Mexico, where operating units have dropped 13 rigs this week to 405, the lowest since January. 2020. This is the biggest drop since January 2016.
Even before oil prices plummeted, most U.S. exploration and production companies (E&P) were ready to announce plans to reduce spending on new drilling for the second consecutive year in 2020.
However, many E&P companies in North America now say they plan to reduce their spending more this year, on average about 30%, according to Reuters data.
Meanwhile, the two largest oil producers in Texas are asking government regulators to consider limiting the number of oil companies they can produce, in a move to prevent prices from plummeting as they did in the past decade. 70s of the last century.
US financial services firm Cowen & Co said 25 of the independent E&P companies they tracked have reduced their spending plans by 36% this year from the previous year, since OPEC + producers failed. failed in a deal to reduce production on March 6, 2020.
Before the OPEC + deal failed, Cowen said independent E&P companies only expected to cut spending by an average of 11% in 2020 from the previous year. In 2019, these companies cut spending by about 10% compared to 2018.
Oil prices only inched up about 5% after receiving positive information from the stimulus package of the US Federal Reserve (FED).
As of early morning March 25, according to Vietnam time, on the New York Mercantile Exchanghe, WTI light sweet crude oil price delivered in May 2020 stood at 24.79 USD / barrel, up 0.76 USD / barrel. in the session. And if compared with the same time on 24/3, WTI oil price delivered in May 5/2020 has increased by 0.83 USD / barrel.
Meanwhile, Brent oil price delivered in May 5/2020 stood at 27.72 USD / barrel, up 0.57 USD / barrel during the session and up 0.28 USD compared to the same time on 24/3.