Toptenforex.com – After a brief respite at the start of the year, the world’s top oil and gas companies are set to double down on cost cutting as a recovery in crude prices after a three-year slump falters.

Corporate hopes were raised by a deal between members of the Organization of Petroleum Exporting Countries and other non-OPEC producers to cut production, which lifted oil prices above $58 a barrel in January, after they had slid to as low as $27 in 2016.

But Brent crude prices have since slipped back below $50 and banks have lowered price forecasts, amid surging output from the United States and other nations not bound by the global oil pact.

Investors are again focusing on the ability of top oil firms such as Exxon Mobil (XOM.N), Royal Dutch Shell (RDSa.L) and Total (TOTF.PA) to live within their means and eke out profits when oil has failed to recover, as hoped, to $60.

The majors, often dubbed Big Oil, have already been through tough spending cuts since a collapse in crude prices since mid-2014 from above $100. They have shed thousands of jobs, scrapped projects, sold assets and squeezed service costs.

The painstaking effort has paid off.

Net income for Exxon, Chevron (CVX.N), Shell, BP (BP.L), Total, Eni (ENI.MI) and Statoil (STL.OL) is set to double on average in the quarter ending June 30 from a year earlier, even though oil prices are back as similar levels, according to analyst estimates compiled by Reuters.

By early 2017, management teams said their operations in 2017 would cover spending and dividend payouts at $60 a barrel, although for many firms this included using scrip programs, when investors can opt for dividend payouts in shares not cash.

Read More : Reuters

 

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