Even before the coronavirus pandemic, the oil and gas industry was faced with slumping prices. However, with a record collapse in oil demand amid the coronavirus lockdown, the COVID-19 crisis has further shaken the market, causing massive revenue and market cap drops for even the largest oil and gas companies.
According to data presented by StockApps.com, the top five oil and gas companies in the United States lost over USD 307 billion in market capitalisation year-over-year, a 45% plunge amid the COVID-19 crisis.
Market cap still below march levels
Global macroeconomic concerns such as the US-China trade war and the oil overproduction set significant price drops even before the coronavirus outbreak. A standoff between Russia and Saudi Arabia in the first months of 2020 sent prices even lower.
After global oil demand plunged in March, Saudi Arabia proposed a cut in oil production, but Russia refused to cooperate. Saudi Arabia responded by increasing production and cutting prices. Shortly Russia followed by doing the same, causing an over 60% drop in crude oil prices at the beginning of 2020. Although OPEC and Russia agreed to cut oil production levels to stabilise prices a few weeks later, the COVID-19 crisis already hit. Statistics show that oil prices dropped over 40% since the beginning of 2020 and are hovering around USD 40 a barrel.
Such a sharp fall in oil price triggered a growing wave of oil and gas bankruptcies in the United States and caused a substantial financial hit to the largest gas producers.
In September 2019, the combined market capitalisation of the five largest oil and gas producers in the United States amounted to USD 674.2 billion, revealed the Yahoo Finance data. After the Black Monday crash in March, this figure plunged by 45% to USD 373 billion. The following months brought a slight recovery, with the combined market capitalisation of the top five US gas producers rising to over USD 461 billion in June.
However, the fourth quarter of the year witnessed a negative trend, with the combined value of their shares falling to USD 367 billion at the beginning of this week, USD 6.2 billion below March levels.
Exon Mobil’s market cap halved in 2020
In August, Exxon Mobil Corporation, once the largest publicly traded company globally, was dropped from the Dow Jones industrial average after 92 years. As the largest oil and gas producer in the United States, the company has suffered the most significant market cap drop in 2020.
Statistics indicate the combined value of Exxon Mobil’s shares plunged by 52% year-over-year, falling from almost USD 300 billion in September 2019 to USD 144 billion at the beginning of this week.
Phillips 66, the fourth largest gas producer in the United States by market capitalisation, witnessed the second-largest drop in 2020. Statistics show the company’s market cap dipped by 49.6% year-over-year, landing at USD 22.9 billion this week.
The Yahoo Finance data revealed that EOG Resources lost over USD 21 billion in market cap since September 2019, the third-largest drop among the top five US gas producers.
Conoco Phillips witnessed a 42% drop in market capitalisation amid the COVID-19 crisis, with the combined value of shares plunging by almost USD 30 billion year-over-year.
Statistics show Chevron witnessed the smallest market cap drop among the top five companies. At the beginning of this week, the combined value of shares of the second-largest US gas producer stood at USD 141.5 billion, a 36.9% plunge year-over-year.
The full story can be read here: https://stockapps.com/five-largest-us-oil-and-gas-companies-lost-307bn-in-market-cap-yoy-a-45-plunge-amid-covid-19-crisis.