Exxon Mobil share price: where next as global job cuts plan unveiled?
The US oil and gas major revealed it is assessing its operations globally with the aim to make job cuts amid weak energy demand and low oil prices, with its shares down 44% year-to-date and trending lower in recent weeks.
- Exxon Mobil assessing global operations with the aim of cutting jobs
- Cost-cutting measures essential to offset weak energy demand and low oil prices
- Exxon Mobil share price trending lower, down 44% year-to-date.
Exxon Mobil revealed it is assessing its operations globally with the aim to make job cuts amid weak energy demand and low oil prices, with its shares down 44% year-to-date and trending lower in recent weeks. The US oil and gas major also announced a voluntary lay-off programme in Australia.
The oil and gas company said that it is unclear at this stage what percentage of its workforce globally will be let go, but has told employees in Australia that it is happy to consider all staff with an interest in voluntary redundancy.
Exxon joins numerous oil and gas companies embarking on major cost-cutting programmes aimed at shoring up balance sheets amid acutely challenging market conditions which have led to a historic collapse in fuel demand.
Exxon Mobil is trading at $39.28 per share at the time of publication, with the stock on a downward trend since mid-August, losing more than 12% of its value.
Exxon Mobil dramatically reduces capital expenditure amid Covid-19
The oil and gas major has significantly cut spending in 2020 by almost a third to around $23 billion, with the company doing all that it can to maintain its dividend after it reported losses for the first half of the year.
‘We have evaluations underway on a country-by-country basis to assess possible additional efficiencies to right-size our business and make it stronger for the future,’ Exxon Mobil spokesperson Casey Norton told Reuters.
As part of its cost-cutting programme, Exxon is looking to sell a 50% stake in its Bass Strait oil and gas venture based in south-eastern Australia, which is valued at approximately $3 billion.
Brent crude and WTI oil prices slide as OPEC production rises
Brent crude fell below the psychological $45 benchmark on Wednesday, falling 72 cents (-1.58%) to $44.86 at the time of publication, while the US West Texas Intermediate (WTI) gave up its earlier gains, sliding 91 cents (-2.13%) to $41.85 a barrel.
The slide in oil prices is being driven by a 950,000 barrels per day (bpd) rise in production by the Organisation of the Petroleum Exporting Countries (OPEC) in August.
The impact of the coronavirus pandemic on global oil demand is worse than previously expected, according to OPEC’s latest monthly report. In fact, oil demand loss this year is expected to hit 9.1 million bpd, representing an increase of 100,000 bpd from its July forecast.
OPEC also warned that the global economy is predicted to shrink by as much as 4% in 2020, up from 3.7% the organisation forecast in July, which if true will weigh on oil prices.
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