Oil Companies Sit on Hands at Auction for Leases
By CLIFFORD KRAUSS: AUG. 20, 2015 PAGE B1 IN NEW YORK EDITION
HOUSTON — With oilprices collapsing and companies in retrenchment, a federal auction in the Gulf of Mexico on Wednesday attracted the lowest interest from producers since 1986.
It was the clearest sign yet that the fortunes of oilcompanies are skidding so fast that they now need to cut back on plans for production well into the future.
The auction, for drilling leases, attracted a scant $22.7 million in sales from five companies, but energy analysts said that came as no surprise on a day when the American oil benchmark price plummeted by more than 4 percent. For the first time since the recession, it is approaching the symbolic $40-a-barrel level. Last summer, it was above $100 a barrel.
A glut on American and world markets is to blame for the depressed prices, but the unusually large daily decline occurred after the Energy Department, in a report, lowered its oil price projections and showed a considerable increase in inventories.
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