Baker Hughes Inc., the third-largest oilfield-services provider, said oil prices below $75 a barrel for a few months may cause energy companies to pull back spending on exploration and production.
West Texas Intermediate, a U.S. benchmark for oil, fell below $80 a barrel for the first time since June 2012 as a North American production boom met with lower forecast demand growth. Brent crude, the global benchmark, reached an almost four-year low of $82.60 a barrel Oct. 16.
Baker Hughes’s customers don’t believe oil prices will stay low, Martin Craighead, chairman and chief executive officer of the Houston-based company, told analysts today on an earnings conference call.
“The returns are still quite attractive,” Craighead said. “Right now it’s full steam ahead.”
Baker Hughes reported third-quarter adjusted profit that missed analysts’ estimates. Its shares tumbled 9.8% to $48.39 at 10:38 a.m. in New York on Oct. 16, the biggest intraday drop since November 2011.
If U.S. oil prices stay below $80 for a quarter, exploration and production companies “are going to sober up,” T. Boone Pickens, chairman and CEO of BP Capital LLC, said in an Oct. 9 interview. “It’s getting their attention.”
Recommended Reading
US Drillers Add Oil, Gas Rigs for First Time in Five Weeks
2024-04-19 - The oil and gas rig count, an early indicator of future output, rose by two to 619 in the week to April 19.
Strike Energy Updates 3D Seismic Acquisition in Perth Basin
2024-04-19 - Strike Energy completed its 3D seismic acquisition of Ocean Hill on schedule and under budget, the company said.
Santos’ Pikka Phase 1 in Alaska to Deliver First Oil by 2026
2024-04-18 - Australia's Santos expects first oil to flow from the 80,000 bbl/d Pikka Phase 1 project in Alaska by 2026, diversifying Santos' portfolio and reducing geographic concentration risk.
Iraq to Seek Bids for Oil, Gas Contracts April 27
2024-04-18 - Iraq will auction 30 new oil and gas projects in two licensing rounds distributed across the country.
Vår Energi Hits Oil with Ringhorne North
2024-04-17 - Vår Energi’s North Sea discovery de-risks drilling prospects in the area and could be tied back to Balder area infrastructure.