Wood Mackenzie: More oil firms on track to live with $40 crude

 
Jessica Morris
Follow Jessica
Energy Consumption and Recycling In Europe
Oil fell through $45 per barrel yesterday (Source: Getty)

Cost cuts mean a growing number of oil firms will stop bleeding cash this year with crude at $40 per barrel, according to energy consultancy Wood Mackenzie.

This is good news for them, as the black stuff has been hovering around $45 due to oversupply concerns.

Read more: This chart shows why UK North Sea strikes won't affect oil prices

It added that all 56 companies monitored will be able to maintain or even expand their operations this year with oil prices above $50.

"This is some achievement given the majority needed over $90 a barrel in 2014," Tom Ellacott, senior vice president of corporate research at Wood Mackenzie, said.

The energy consultancy also found oil and companies' exploration spending had been hard hit by fat trimming exercises - falling 49 per cent, or a total of $230bn, compared to two years ago.

Read more: Bit of a blip for BP as Deepwater Horizon disaster and low oil prices eat into profits

"Balance sheet management is front of mind across the industry - cost containment and capital discipline are still the strident messages emanating from all companies," Ellacott added.

"But strategies will need to shift away from survival mode and look to the future."

Related articles