Oil Prices Hurt Capex

Capital expenditures are affected by many factors, including corporate profits and sales. The recent drop in oil prices has caused a sharp drop in capital expenditures by oil companies. For example, BP dropped its capital expenditures for 2015 to $18.7 billion, significantly below its planned capex of $24-$26 billion. ExxonMobil dropped its 2015 capex by 25 percent to $23.2 billion, and Anadarko plans to drop its capex for 2016 to one-half of its initial budget.