Skip to navigationSkip to content

Investment in the US oil industry hasn’t been this weak in decades

An oil pump works as colored smoke dissipates from an aerobatics team's performance during the Bahrain International Airshow at a military air base in the desert oilfields of Sakhir, Bahrain.
AP Photo/Hasan Jamali
US oil investment is up in smoke.
By Melvin Backman
Published Last updated This article is more than 2 years old.

The crude crumble rolls on.

Growth in US GDP, while slowing dramatically, still moved along at an 0.7% annual clip during the fourth quarter of 2015, putting the full-year growth rate (pdf) at 2.4%. But one subsection over the American economy is a giant, slow-motion train wreck: the oil industry. The sector is seeing its worst drop-off in investment since 1986—the last major oil bust—with one important gauge down 35% from 2014.

Companies are slashing their spending on new equipment in a bid to survive the downturn in oil prices. And it wasn’t just the physical stuff that got shed last year. The US oil industry cut jobs in every month of 2015.

Amid all this, you might be forgiven for being surprised that US oil production has remained surprisingly resilient, down just 4% from its peak last year to 9.2 million barrels per day.

There was hope yesterday (Jan. 28) that the global crude feud between OPEC, the US, Russia, and other major producers might be coming to an end. But as has been repeatedly demonstrated, nobody wants to make the first move. At this point, all investors can do is fill up their SUVs for cheap through the tears.

📬 Kick off each morning with coffee and the Daily Brief (BYO coffee).

By providing your email, you agree to the Quartz Privacy Policy.