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Much has been written recently about the effects, both good and bad, of cheap oil.

Today came news that falling prices will result in a 14.1 percent reduction in spending on exploration and production by oil and gas companies in North America, and that number could go as high as 30 percent if U.S. crude oil continues to trade in the $50-$60 range, according to a survey by Barclays of 225 companies in the industry.

In fact, the industry is wasting no time. On Wednesday, January 7, contract rig company Helmerich & Payne announced that it planned to idle as many as 50 of its rigs over the next month. They are not alone; the national rig count fell by over 40 rigs in the last two weeks alone, indicating that drilling costs have outpaced the price that companies expect to receive for the oil. And while the impact is greatest in North America, worldwide spending will fall by as much as nine percent, or roughly $61 billion.

The problem, according to Barclays, is that companies had built budgets on the assumption that Brent and U.S. crude would trade at around $70 and $65 per barrel, respectively. However, Brent crude futures are currently at $50.50, and U.S. crude futures are at $48.57 – both five-year lows and half of what they were in June of last year.

Barclays says that this is only the seventh time in the 30-year history of its survey that spending has been predicted to fall.

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