Price wars and the COVID-19 pandemic force major oil companies to seek options
Major oil companies are considering their options and weighing up opportunities as implications from the global pandemic continue to drive prices down.
Lockdown measures and travel bans have driven down demand for oil and gas, and low prices have caused major oil companies to take emergency measures to raise debt or otherwise file for bankruptcy. The industry also considers itself largely left out of the congressional relief and stimulus packages.
Source: Quartz | qz.com Data: EIA, MarketsInsider
M&A activity in the sector crashed in the first quarter, a report from Enverus shows, with the US reporting $770million in domestic M&A deals – less than a tenth of the quarterly average for the last ten years.
Source: Quartz | qz.com Data: Rystad Energy
Given the uncertainty of the current situation, opinions are mixed as to how short-lived this dip will be, and whether prices can be expected to rise back to their previous levels any time soon. How quickly the industry will recover and whether the market will stabilize enough to bring back investor confidence in the sector remains unclear.
Quartz | qz.com Data: Rystad Energy
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