A recent study by Houston-based consulting firm Graves & Co. estimated that more than 350,000 jobs in oil and gas production have been lost worldwide since oil and gas prices began their downturn in late 2014. Faced with lower prices, the major companies slashed capital expenditure by around a quarter last year, and further cuts of around 23% have been announced so far in 2016. Operating budgets are being cut to the bone.
These corporate austerity measures are beginning to take their toll on non-OPEC production, which is expected to contract by around 1 million barrels per day (MMb/d) in 2016 from 2015 levels and to fall further in 2017. Meanwhile, OPEC continues to pump at full throttle. OPEC production increased to 32.86 MMb/d in June, according to third-party estimates quoted in the cartel’s latest monthly report.
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