‘Decline in oil prices has bottomed out’
THE world’s two largest providers of oilfield drilling and fracking services have now declared that the worst may be over in the two-year-old oil market crash.
Schlumberger Ltd said on Thursday the oil industry appeared to have reached the bottom of the cycle, echoing smaller rival Halliburton Co, which on Wednesday said the North American market reached its lowest point in the second quarter and was poised for modest growth the rest of this year.
“They’re the two dominant players in the market, both of whom just called the bottom,” said James West, an analyst at Evercore-ISI in an interview, here, on Thursday.
“It’s a positive. Calling the bottom in the market sends the right signal and Schlumberger has a tonne of credibility.”
As the downturn dragged on, executives at the world’s largest oilfield services provider have had to push back their expectations for an improvement in drilling and fracking work, with crude prices remaining more than 50 per cent lower than their peak in 2014.
Schlumberger reported a second-
STRONG SIGNAL: Schlumberger echoes rival’s positive sentiment
quarter loss of US$2.16 billion (RM8.77 billion) compared with a profit of US$1.12 billion a year earlier, according to a statement on Thursday.
The company was expected to post a US$296.3 million profit, according to the average of 28 analysts’ estimates compiled by Bloomberg.
It also said it cut another 8,000 jobs in the second quarter after slashing a similar amount in the first three months of the year.
“In the second quarter market conditions worsened further in most parts of our global operations,” said Schlumberger chief executive officer Paal Kibsgaard. “But in spite of the continuing headwinds, we now appear to have reached the bottom of the cycle.” Bloomberg