The American energy major, Chevron, has announced it will cut capital spending by 26% next year and make deep cuts through the middle of the decade, as a result of the Covid-19 pandemic’s industry-wide reappraisal of fossil fuel investment.

Chevron will spend $14bn next year and up to $16bn through 2025, a reduction from the company’s previous spending plans of $19bn to $22bn through 2024 made before the outbreak of the pandemic.

Earlier in the week, ExxonMobil said it would reduce capital spending by $10bn to a new level of $25bn per year through 2025.

“Exxon, struggling to pay a dividend, is widely seen to have been particularly hard hit by the pandemic, losing more than $2.3bn in the year’s first three quarters and reducing the book value of its assets by up to $20bn,” analysts from broking house, Lorentzen & Stemoco, noted in an update to clients.

On tanker prospects, Danish Ship Finance warned in its latest shipping market review published on Friday that with the short to medium-term outlook looking bleak, global oil demand remains weak, while oil inventories are high and fleet availability is set to increase as vessels return from floating storage. The reason for this is the fact that the coronavirus cases is weighing on the recovery in global oil demand.

Alphatanker reported that floating storage continues to draw steadily and is now one third below its end-May peak.

“Our projections for oil market fundamentals imply that this steady draw will continue over the first half of 2021 which suggests that more tankers will be released from the storage fleet and will enter the general trading pool, pressuring hire rates.

“Moreover, the oldest tankers from the storage fleet will likely never return to trading and instead will be directly towed to a breakers yard upon discharging,” Alphatanker suggested in its latest weekly report.