Big Oil cuts back as analysts slash forecasts

Oil is heading where?   

The ongoing rout in oil markets is putting high-profile industry names on the back foot, with Shell and BP announcing major changes to operations this week.

BP announced job cuts in its onshore operations in the U.K. on Thursday. It told CNBC that it expects a reduction of around 200 staff and 100 contractor roles in light of "major reshaping" for the business and "toughening market conditions."

Meanwhile, Anglo–Dutch multinational Royal Dutch Shell announced that it had decided to shelve the construction of a new petrochemicals complex in Qatar, was due to be a tie-up with the country's state-owned oil firm.

In the exploration sector -- the first to be hit by falling oil prices -- U.K.-based Tullow Oil has painted a bleak outlook for the years ahead. The firm announced earnings Thursday, with write offs of $2.3 billion, and warned there had been "major steps taken to strengthen the business to adapt to current market conditions."

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Rival exploration firm Premier Oil also announced an estimated $300-million impairment charge for the second half of this year on Wednesday, with delays and cost-cutting plans expected in the development of some of its new oil fields.

"We see massive downgrades in the energy sector; totally expected given where the oil price has gone," James Butterfill, a global equity strategist at Coutts, told CNBC Thursday. Nonetheless, he said that some majors would be able to ride the current storm by cutting capital expenditure.

Simon Maughan, the head of research at OTAS Technologies, told CNBC that BP, Royal Dutch Shell and ExxonMobil would be well insulated because of their low cost of production.

Weak global demand and booming U.S. shale oil production are seen as two key reasons behind the price plunge, as well as OPEC's (Organization of the Petroleum Exporting Countries) reluctance to cut its output.

Both WTI and Brent crude prices have crashed by around 60 percent since mid-June last year and oil stocks have been crushed, underperforming the wider benchmarks.

off shore oil and gas drilling rig exploration
Landbysea | Vetta | Getty Images

WTI crude for February delivery enjoyed a brief spike on Wednesday but traded lower on Thursday, around $47.30 a barrel at 11:00 a.m. ET. Brent crude futures were trading at around $47.70 a barrel at the same time.

The Australian and New Zealand banking group ANZ became the latest to slash its price forecasts for oil on Thursday morning.

It lowered its Brent and WTI average 2015 price forecasts by 27 percent to $50 per barrel and $48 per barrel, respectively, and said it expected Brent to hit $42 a barrel in the near-term and WTI to fall to $40 a barrel.