US producers face tough choices on growth, capital returns as oil falls below $60

Arunima Kumar - Reuters - 09/04
A plunge in oil prices below $60 per barrel due to an escalating trade war may trigger anxiety across the U.S. oil patch, likely forcing companies to double down on measures including cuts to share buybacks and capital expenditures, analysts have said.
  • Oil benchmarks dip below $60 a barrel amid trade war fears
  • Oil companies may cut capex, halt buybacks, analysts say
  • Analysts expect cautious tone in April earnings
April 9 (Reuters) - A plunge in oil prices below $60 per barrel due to an escalating trade war may trigger anxiety across the U.S. oil patch, likely forcing companies to double down on measures including cuts to share buybacks and capital expenditures, analysts have said.
Brent crude and West Texas Intermediate (WTI) futures slid to their lowest since February 2021, as sweeping tariffs imposed by U.S. President Donald Trump sparked concerns of a recession amid signs of higher supply from top producers.

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Raymond James analyst Pavel Molchanov said some producers might reduce 2025 capex if the downturn persists, though broader cuts will depend on the depth and duration of the slump.
"Share buyback is typically the 'flex variable' that can easily move up and down depending on how much free cash flow is being generated."
During the COVID-19 crash in 2020, when oil demand collapsed and prices briefly turned negative, Exxon Mobil (XOM.N), opens new tab slashed capital spending by 30%, while Chevron (CVX.N), opens new tab cut its budget by $4 billion and paused its buyback program.
ConocoPhillips (COP.N), opens new tab had also trimmed sp...
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