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Oil price slump hits BP and Exxon

Oil price slump hits BP and Exxon
By Euronews with Reuters
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The bad news keeps pouring out of the oil industry. BP suffered its biggest loss in 20 years and Exxon Mobil has reported its smallest quarterly profit in more than a decade.


BP suffered its biggest loss in 20 years amid plans to cut thousands of jobs, Exxon Mobil has reported profits plummeted and the rating agency Standard & Poors has downgraded Shell.

BP said it lost $6.5 billion (5.95 billion euros) last year.

It will cut 7,000 jobs by the end of next year – that is almost nine percent of its workforce.

BP’s results are the latest in a round of weak fourth-quarter earnings in the sector.

And analyst Simon Smith with FXPro said everyone is suffering: “I think there are some questions about the management in terms of their ability to transform a company but, quite often, it’s their ability to adapt and their resilience to find other sources of revenue and that’s always hard for oil companies because you are dependant on the price of a commodity which at the best of times is volatile and unpredictable and that is one of the issues for many oil and gas companies.”

In the US, Exxon Mobil reported a 58 percent drop in quarterly profit to $2.78 billion (2.55 billion euros) from $6.57 billion in the same period a year earlier.

That was the smallest quarterly profit in more than a decade for the world’s biggest publicly traded oil company which said it will cut 2016 spending by one-quarter and suspend share repurchases.

“While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management,” Rex Tillerson, the chairman and chief executive officer, said in a statement.

That came just days after Chevron, the second largest US producer, revealed its first quarterly loss in more than 13 years, while Royal Dutch Shell was expected to announce a near halving of profits on Thursday.

Oil prices fell further on Tuesday as hopes for a deal between OPEC and Russia on output cuts faded.

Crude has dropped about 70 percent from the 2014 high of over $100 barrel.

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