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In addition to placing workers on furlough, Noble Energy will also reduce the planned capital spending for 2020 by $500 million and operating costs by at least $50 million. NBL stock was up 13.75% yesterday.
Alongside with coronavirus, the world is observing the oil price war. Saudi Arabia has set low oil prices, which has led to the demand for oil moving down. On Monday, the prices fell to 17-year record lows. After that, U.S. President Donald Trump and Russian President Vladimir Putin discussed the decline. Then, on Tuesday, oil prices surged. And this jump resulted in oil companies’ stocks rise. Noble Energy (NASDAQ: NBL) stock rose 13.75% yesterday. The shares of the oil exploration and production company closed at $6.04. However, Noble Energy stock was 2.48% down in the after-hours trading, at $5.89. At the moment of writing, in the pre-market, NBL is at $5.89 (-2.48%).
Shares of Devon Energy (NYSE: DVN) and Diamondback Energy (NASDAQ: FANG) rose as well, closing 8.6% and 11.1% up accordingly. But today in the pre-market, they are falling by -7.09% and -2.67%.
Noble Energy to Reduce Pay and Workforce
The U.S. leading oil and gas producer has announced its decision to cut down employees’ salaries. Besides, it will reduce its contractor workforce by 75%. Currently, Noble Energy has a total of 2,300 employees. Placing workers on furlough, the company will continue to provide full health benefits.
In addition, the company will reduce work hours for about 30 percent of its U.S. employees. The changes will start on April 6 and will be temporary. With the move, Noble Energy hopes to overcome the coronavirus-fueled economic crisis.
Earlier, Noble Energy announced its plan to reduce the planned capital spending for 2020 by $500 million and operating costs by at least $50 million.
What’s Going on In Global Oil Market
After Saudi Arabia and Russia failed to agree on oil supply cut to stabilize the price, oil prices fell to the lowest level in more than 17 years, to trade at $23.03. Then, U.S. President Donald Trump and Russian President Vladimir Putin agreed in a phone conversation to have their officials discuss the drop in global oil markets. On Tuesday, U.S. Energy Secretary Dan Brouillette discussed with his Russian counterpart Alexander Novak the slump in global oil markets. According to Energy Department spokeswoman Shaylyn Hynes, the talk was ‘very productive’.
“Secretary Brouillette and Minister Novak discussed energy market developments and agreed to continue dialogue among major energy producers and consumers, including through the G20, to address this unprecedented period of disruption in the world economy.”
What will happen next is unclear. But it is known that Donald Trump is going to meet with Saudi Arabia and Russia and push reaching an agreement.
“They’re going to get together and we’re all going to get together and we’re going to see what we can do. The two countries are discussing it. And I am joining at the appropriate time, if need be.”
Trump’s administration will also send a special energy envoy, Victoria Coates, to Saudi Arabia to persuade the country to cut crude output.