March 22, 2020 - 12:16 PM EDT
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Dividends Aren't Surviving the Oil Market Meltdown

Oil prices have nosedived this year. Dual shocks to demand (from the slowdown in the global economy caused by the COVID-19 outbreak) and supply (from the collapse of OPEC's market support agreement) have pushed the price of crude oil down to its lowest level in decades. That's cutting deeply into the cash flow of oil producers, forcing them to slash spending.

The first thing they've cut is their capital expense budgets. However, a growing number of energy companies are also reducing their dividends to conserve cash. That trend is likely to continue as they focus on surviving this turbulent period in global history.

Image source: Getty Images.

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Source: Motley Fool (March 22, 2020 - 12:16 PM EDT)

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