Lower fuel prices might sound like good news for most people, but it’s not so great for oil producers since their profits are taking a big hit. The price of crude oil has dropped by more than 50% compared to last summer, significantly affecting major companies like Exxon Mobil and Chevron. For instance, Chevron recently announced that their net income for the second quarter plummeted by 90% compared to the same time last year, and Exxon saw their profits cut in half during the same period.
In response to these challenges, several oil companies, including Chevron and Royal Dutch Shell, announced major job cuts this week to save costs. Some analysts believe the energy sector is just starting to adjust to these consistently lower crude oil prices.