HOUSTON (Reuters) – Exxon Mobil Corp (N:) on Tuesday throttled back a multi-year investment spree in shale, LNG and deep water oil production and will cut planned capital spending this year by $ 10 billion as the coronavirus pandemic saps energy demand and oil prices.
Oil companies are reversing 2020 spending and production increases by an average 20% as countries limit air travel, order businesses to close and tell residents to stay home. In a one-two punch to suppliers, crude prices are down nearly 60% this year and demand for fuels is falling sharply.
The largest U.S. oil producer, which last month pledged “significant” cuts to spending, set 2020 capital expenditure at $ 23 billion and could go lower if required, it said in a statement. Exxon previously expected to spend up to $ 33 billion and had spent $ 26 billion last year.
The U.S. oil major’s shares were up about 5% at $ 42.52 in premarket trading.
Exxon’s market value has fallen 42% this year as the oil-price war between Saudi Arabia and Russia has taken a toll on the energy sector. However, its stock has been a laggard for years, dropping 54% over the last five years compared with an 18% gain in the benchmark U.S. S&P 500 stock index.
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