Exxon's Rapid U.S. Production Growth Can't Last
The new coronavirus could very well tip the world into a recession. It has already pushed air travel into a major slump and left industrial activity mired in a slowdown. With an already oversupplied market, oil prices have plummeted to the $30 level. It was hard for oil companies to turn a profit when oil was in the $50 range; it's even harder now. Oil companies the world over are starting to pull back on their drilling efforts. But that's not why ExxonMobil's (NYSE: XOM) U.S. production growth is destined to slow. Here's a deeper dive into the issue and why you need to understand the subtleties of Exxon's onshore business before jumping to conclusions.
There's no question that COVID-19 has been a disaster for the energy sector. And it will likely get much worse before it gets better, with countries around the world telling people to stay home (or demanding it!), travel being curtailed, and general economic growth grinding to a halt in the most affected regions. China, one of the largest economies in the world, was the preview of what could happen on a global scale. And even that giant nation's recovery won't be enough to offset the hit to the world as COVID-19 spreads rapidly around the globe.
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Source Fool.com
