Fourth-quarter earnings significantly missed expectations, but they do not necessarily negate the broader improving trend for the oil majors.
The oil majors are expected to post $80 billion in organic free cash flow in 2018, but spending is expected to be modest.
The oil majors are posting their best quarterly figures in years, an indication that they are adapting to the new price environment. After several years of spending cuts and rising debt, the largest integrated oil companies have turned a corner.
The glut of supply could last years, threatening to keep prices low until the 2020s, but the oil majors are playing the long game, expecting the demand for gas to grow substantially over time.
The promising results from Brazil's auction demonstrate that the country's offshore sector remains attractive even as the global oil industry has been hesitant to invest in big projects as a result of relatively low oil prices.
Saudi Arabia’s plans to buy and sell third-party crude prompt concerns about how widely Aramco will expand its trading apparatus and how it will use its market power.
Independent producers are struggling to hit output targets at current price levels while the majors are focusing on becoming more efficient.
The outlook for Argentina’s Vaca Muerta is arguably more positive than it has ever been, with some oil majors recently giving the go-ahead on big shale investments in the country.
Oil majors may not be entirely out of the woods yet, but first-quarter performances suggest that they are on the upswing after nearly three years of mostly red ink.
If oil demand were to peak, the industry would likely see a good bit of consolidation, but the situation would not bring about a collapse.