The oil and gas industry is riding out a violent wave that crashed crude oil prices per barrel to less than $40, down more than 60% from the high of summer 2014. The result is a favorable receipt at the gas pump for consumers, but massive losses for oil and gas producers. In fact, in the third quarter of 2014, when oil prices were more than $100 per barrel, major gas producers posted a total net income of $22.9 billion, according to Bloomberg. It had disappeared by the end of 2015.
An increased supply and lower demand has some countries in the Organization of the Petroleum Exporting Countries, including Venezuela and Brazil, finding themselves in financial and political turmoil. For oil and gas companies, decreased earnings have resulted in a number of bankruptcies, layoffs and investment cuts.
Many experts believe the price of oil will remain low for years, so to make up for the lost revenue, oil and gas producers are looking for ways to decrease production costs. One way to do so is by investing in the “internet of things.”