In the private sector, the pain is being felt from the smallest producing companies to the largest.
ConocoPhillips stunned Wall Street on Thursday when it became the first big oil company to slash its dividend. It cut its quarterly payout by two-thirds and shaved another 17 percent from its capital spending plan after reporting a $3.5 billion loss.
BP earlier this week announced a loss of $6.5 billion in 2015, its largest ever annual loss. Shale drillers are also suffering. Last week, Continental Resources said its output would fall by about 10 percent this year and it joined others in cutting its capital budget.
"That is capitulation. I know now that all companies are in capitulation. Nobody's pretending anymore," said Oppenheimer energy analyst Fadel Gheit.
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Conoco's dividend cut was a big deal for the industry and sends a strong message for a sector that has treated its ability to pay dividends as sacrosanct. "These companies were supposed to be cash cows that guaranteed income flow. You're not going to be getting it. The whole model is being upended," said John Kilduff, a partner with Again Capital.
"The dividend is at risk for most companies," Gheit said. "Even if oil prices go to $40 or $50, it's not going to save the dividends."
Gheit said he expects to see more bankruptcies and mergers, as companies struggle to survive a long stretch of weak prices.
All of this talk, however, is not reducing the amount of oil on world markets, with the U.S. continuing to show strong buildups in inventories and an unrelenting production level of about 9.2 million barrels a day.
It's also not alone as Saudi Arabia continues to produce at high levels. Russia, in fact, pumped 10.88 million barrels a day last month — the most since the fall of the Soviet Union. Even Iraq has upped production, reaching an output level of 4 million barrels a day last month.
"I think we're now into the desperation zone," said IHS Vice Chairman Dan Yergin. "What you saw coming down the road is now here, countries not only running out of money but running out of resilience. Virtually every country now is saying we really have to reform. We don't have the succor of high oil prices."
All this pain among producers may be nearing a threshold where a real capitulation will not be far behind — and oil can bottom because supplies will stop increasing. But even if oil prices are beginning to bottom, it is expected to be a long slow process, and prices are expected to remain at low levels for a long while.