for Capital expenditures
The outlook for oil prices in 2019 is highly uncertain, but the effects of low prices are starting to wear down the U.S. shale industry. Recent data from the Dallas Federal Reserve suggests a slowdown from the U.S. shale industry is already underway.
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The oil majors are expected to post $80 billion in organic free cash flow in 2018, but spending is expected to be modest.
Total capital and exploration spending on global oil and gas will likely bottom out in 2018, and investment may not recover to levels seen before the 2014 market downturn until the mid-2020s.
The U.S. oil and gas sector is very upbeat with prices above $50 per barrel, but one CEO warns that the industry must manage its growth or the market could collapse again.
Sharper-than-expected decline rates as a result of limited investment and a major cutback in capital expenditures for brand new projects are setting the stage for a dramatic market shift by 2018, according to a major consultancy.
A general consensus has emerged that upstream investment cuts will eventually push prices upward, resulting in a potentially dramatic correction that rattles the global economy. A price spike, while possible, is not yet a forgone conclusion.
Gunvor is one of the largest commodity traders in the world. David Fyfe, Gunvor's Head of Market Research and Analysis, talked to The Fuse about current oil market dynamics, shifting trends in global trading, and the status of OPEC.
The decline in oil prices that began in mid-2014 has wreaked havoc across all different types of companies in the industry, and there seems to be no respite in the short run. Companies are continuing to lay off staff, cut back on projects, and report eye-opening losses.