Majors make cuts as oil price sparks tough times

Low prices and poor earnings mean the majors are cutting spending, jobs and projects

The latest poor set of earnings releases from the oil majors merely reinforce that there are tough times ahead for these companies that so often act as defensive stocks. All are cutting spending, jobs and projects; some will come out of it in better shape than others. At the heart of the problem was the 60% fall in the oil price from last June. The oil price has risen somewhat in the past few weeks to around $60 a barrel, but with weak oil demand persisting, few believe the price will recover in a sustainable way until the second half of the year, at the earliest. Further hitting the majors' profits is that oil is getting harder to find and more costly to extract, forcing them to stall proje