Oil's slide below $30 sends shockwaves far and wide

NEW YORK - US oil stumbled below $30 for the first time in 12 years to levels that threaten the survival of many US shale firms, spur more belt-tightening by oil majors and spell more pain for crude-producing nations and regions.
A seven-day losing streak fueled by concerns about a continued supply glut and fragile demand from China, the world's No. 2 consumer, wiped out almost a fifth of crude prices this year and 70 percent since mid-2014.
Traders have all but given up attempting to predict where the new-year rout will end, with momentum-driven dealing and overwhelmingly bearish sentiment engulfing the market. Some analysts warned of $20 a barrel; Standard Chartered said fund selling may not relent until it reaches $10.
And more of the world's biggest energy companies are conceding that it may be many years before prices recover. On Tuesday, US crude futures traded below $50 through 2021.
British oil and gas giant BP Plc said on Tuesday it would slash 5 percent of its workforce in the face of the continued slump while Brazil's state oil firm Petrobras cut its investment plan for the third time in six months.
Royal Dutch Shell Plc and Exxon Mobil Corp meanwhile have seen their stock decline by 11 and 4 percent respectively.
The latest cuts add to the hundreds of thousands of job lost and billions of dollars spending cuts throughout crude's 18-month slide from levels above $100 a barrel in the summer of 2014, a collapse that has run far longer and deeper than originally expected, reaching crisis point for some.
For Russia, which relies on energy for about half its budget revenues and 40 percent of exports, $30-a-barrel oil could wipe out in just over a year the nation's rainy day funds amassed during bull energy markets and blow a hole in its budget.
Even Saudi Arabia, whose policy of maintaining output to defend its market share even as prices slide has been blamed, together with the resilience of US shale producers, for the persistence of the global supply glut, is feeling the squeeze.
In its 2016 budget unveiled late last month, Riyadh announced a series of spending cuts and reduction in subsidies as oil revenues shrink.
But with major US energy lender Wells Fargo estimating that sustained prices below $40 per barrel, let alone $30, are too low for US shale producers to survive in the longer run, the stakes are exceptionally high for the young industry that turned the United States into a leading oil and gas producer.
The rout has already pushed dozens of small firms into bankruptcy or turned them into "zombies" firms that barely manage to pay their bills and service debts, but do not earn enough to ensure sustained production and revenues ahead.
Stocks of US energy companies lost more than 9 percent in the past nine trading days and the sector is expected to report a 70 percent annual drop in earnings per share for the fourth quarter, according to Thomson Reuters data.
There are few signs suggesting any near-term relief. The US Energy Information Administration predicted on Tuesday that already heavily swollen global oil stockpiles would continue rising until the second half of next year.
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