The U.S. Energy Information Administration (EIA) report released yesterday forecasts energy prices are not expected to recover soon with WTI oil prices staying below $50/barrel until end of 2021. Energy players are looking at all options to forge ahead. Oil giant BP announced earlier this week that it will cut 10,000 jobs to reduce costs. Not surprisingly, all energy companies have been looking to cut spending as oil prices have swooned in recent years beginning with a slide in 2015 from over $100/barrel to below $50/barrel. In the last 5 years, oil prices have remained volatile, gyrating from below $30/barrel in 2016 to almost $80/barrel in 2018 and then crashing to near zero earlier this year, before rebounding to $38/barrel yesterday.
This volatility has shaken up the industry and many energy companies are taking the predictable path of reducing expenses and deferring capital expenditures. Meanwhile others are looking at unexpected saviors, from private equity and competitors, financial investors and lenders, to utilities and corporate consumers, from hedging with Wall Street banks to public funds from Congress.