Crude oil prices experienced an improvement this week with West Texas Intermediate trading at $43.25 a barrel, and Brent crude at $45.94 a barrel, on Wednesday. This 3-percent increase came after the Energy Information Administration (EIA) said crude oil inventories shed 7.4 million barrels during the week of July 31, according to a report from oilprice.com.
The day prior, the American Petroleum Institute (API) said there was an inventory draw of 8.587 million barrels during the last week of July.
The second quarter has been a tough season for oil and gas, and according to Bloomberg. ExxonMobil has warned that 20 percent of the world’s oil and gas reserves may no longer be viable if oil prices fail to recover before the end of the year.
If lower prices continue this year, Bloomberg reported, “certain quantities of crude oil, bitumen and natural gas will not qualify as proved reserves at year-end 2020,” the company said Wednesday in a regulatory filing. Twenty percent would affect the equivalent of almost 4.5 billion barrels of crude, according to the report. This is equivalent to enough to supply every refinery on the U.S. Gulf Coast for 18 months.
Some oil and gas companies have written off billions in assets since the value of those assets are no longer what they used to be, according to oilprice.com. But Exxon was not among those companies.
Compared to earnings of $3.1 billion in the second quarter in 2019, Exxon recorded its worst quarterly loss second quarter of this year, booking a loss of $1.1 billion, oilprice.com reported.
Exxon is not moving to cut its dividend; however, it is expected to make job cuts, cuts to pension matching contribution, and other cost discipline issues, oilprice.com attributed to various sources.