While the U.S. oil industry is in the throes of panic as demand has fallen out of the oil market, China is suffering its own oil crisis? resulting in capex cuts for its major oil giants that seek to derail the Asian nation's ambitious plans to get a stronger foothold in the world's oil market.

China's three largest state-run oil and gas companies?PetroChina, CNOOC, and Sinopec?are making significant cuts their 2020 spending plans as oil prices falter.

CNOOC will cut capex this year by 11% over previously published figures. For 2020, CONOOC's capex will fall to 75-85 billion yuan (US$10.6-12.0 billion). It will not only cut capex at home, but abroad as well, including across its operations in Canada and the United States. In the United States.

PetroChina is planning an even bigger cut to spending this year, to $28 billion from $41.6 billion. That's after a Q1 loss of $2.29 billion. For comparison, it saw a profit of $10.25 billion in Q1 2019, according to several media sources.

Sinopec is making a 20%-25% cut to capex for 2020, to 108 billion - 115 billion yuan (US$15.2 billion to US$16.2 billion), according to a research note from Sanford C. Bernstein & Co. cited by Bloomberg.

The cuts to capex for China's oil majors are a deviation from its years-long practice of pumping oil at great expense to cover the significant oil consumption needs, which have simmered down in Q1 and Q2 due to lowered industrial output due to the spread of the coronavirus that originated in Wuhan, China.

As Bloomberg pointed out, China's oil industry capex cuts are in line with other global oil major capex cuts that we've seen over the last month.

The price of Brent had slipped to $22.61 by Thursday morning, down from more than $65 per barrel at the beginning of the year.?

By Julianne Geiger for Oilprice.com

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