Can Energy Firms Break the Historical Nexus Between Oil Price Falls and Large Losses?
Over the past 20 months, oil prices have fallen by about 70%. Historically, sharp declines in oil prices have led energy companies to scale back on spending in areas such as staffing, employee training, and maintenance, which have subsequently been followed by periods of increased losses.
Our new report, "Can Energy Firms Break the Historical Nexus Between Oil Price Falls and Large Losses?", explores the historical relationship between sharp falls in oil prices and periods of increased losses in the industry, which typically follow.
Today, companies are already beginning to undertake cost-cutting measures in an attempt to protect their revenues. Yet they must be careful in their approach, taking heed of lessons from past cycles in order to ensure history doesn’t repeat itself.