WASHINGTON, Feb. 11 (UPI) -- Investment in the mining and other extractive industries, including oil, declined in the United States by more than 30 percent last year, federal data show.
When measured as a share of total private U.S. investments, federal data show spending in the mining and exploration sector dropped from a 5 percent share in 2014 to just more than 3 percent last year.
A daily briefing from the U.S. Energy Information Administration said low crude oil prices are the major factor in the reduction in capital spending.
"Fourth-quarter earnings statements from U.S. oil companies indicate plans to further reduce capital expenditure to balance spending with lower cash flows until crude oil prices increase enough to make investments economic," EIA said. "These oil-company reductions could continue to put downward pressure on investment spending in the broader U.S. energy sector."
Weatherford International, which provides services for the exploration and production side of the sector, said it lost $1.2 billion during the fourth quarter, with revenues falling 46 percent year-on-year to $2 billion. Rivals Schlumberger, Baker Hughes and Halliburton all reported similar losses when they issued their financial statements in January
Weatherford's top executive Bernard J. Duroc-Danner described the market downturn as brutal.
According to data from the U.S. Bureau of Economic Analysis, total spending on U.S. mining and exploration dropped 35 percent last year for its second-largest year-on-year decline in more than a half century.
"Low commodity prices remain a significant factor in U.S. firms' investment decisions," EIA said in a statement.
Crude oil prices are lower in part because supplies far outweigh global demand.