Unprecedented is how many oilfield services executives have described current oil market conditions. Several oilfield services companies have withdrawn financial guidance issued less than a month earlier, as work backlogs begin to be impacted by cutbacks in customers’ spending. These companies promised to provide new and more detailed guidance in Q1 2020 earnings calls scheduled to be held in April and May.
Their clients have reacted quickly to the market volatility by announcing significant cuts in capital expenditure. Oil and gas companies have cut capital spending for 2020 by at least $75.8bn, with several having already announced further reductions (you can see our recent note on this here). Projects are being deferred and contracts cancelled as discretionary spend is curtailed.