Exxon Mobil has lowered its oil price outlook until 2027, according to internal company documents reviewed by The Wall Street Journal.

As part of an internal financial programming exercise this fall, Exxon lowered its oil price forecasts for each of the next seven years, according to these documents. These reductions range from 11% to 17%

This significant decrease suggests that the Texas oil giant expects the fallout from the coronavirus pandemic to be felt for much of the coming decade. The fossil fuel industry is also facing increased competition from renewable energy, the growing emergence of electric vehicles, and the prospect of increased global regulations related to climate change.

Unlike some of its competitors, Exxon does not publish its internal commodity price reviews, which it considers confidential. Some investors are pressuring Exxon to do so, arguing that these forecasts are essential to fully understand a company's plans and the future value of

In 2019, Exxon predicted, in its internal documents, that the price of Brent, the global benchmark price, would average around 62 dollars per barrel over the next five years, before rising to 72 dollars in 2026 and 2027.

This summer, the company lowered its forecasts. It set the price of a barrel between $50 and 55 dollars for the next five years, and reduced it to 60 dollars for 2026 and 2027, according to its September documents.

Brent is currently trading at around $47 per barrel after this week's rise, which brought prices back to their highest levels since spring.

The new price forecast made by Exxon was drawn up at a preliminary stage in modeling its financial plan, which the company's board of directors was expected to decide on this month, according to one of its executives. An Exxon spokesperson declined to say what the company's current price forecasts are, explaining that the company uses a variety of prices to develop business plans

Oil prices, which have been lower in recent years, threaten to put additional financial pressure on Exxon, which recorded three consecutive quarterly losses this year for the first time in its history. Before the pandemic, the company was executing its plan to spend $230 billion to extract an additional 1 million barrels of oil and natural gas per day in 2025

Although Exxon does not disclose its forecasts, it has made optimistic public statements about the long-term future of the oil industry after the pandemic.

In October, the company told investors that with the current under-investment in the oil and gas production sector, the world would run out of fossil fuels in the years to come. In a post published on the Exxon website in October, CEO Darren Woods called the industry's setbacks temporary and assured that the use of Exxon products would increase in

“Even taking into account the impact of Covid-19 on short-term demand, the investment strategy remains relevant,” wrote Mr. Woods.

Stephen Littleton, Exxon's head of investor relations, said the company was determining the level of its capital investments over several decades and that the coronavirus had not changed its long-term vision. Exxon did not cancel any projects because of the pandemic, but only delayed them, he said

“The fundamentals have not changed. The only thing that has changed is the timing, because we are sure that demographics and wealth will increase,” Littleton explained in an interview

With current oil prices, Exxon is struggling to cover its dividends, which amount to $15 billion per year. In 2020, the company went into debt to achieve this. So far, it has continued to pay its dividends, unlike its competitors. Shell and BP, in particular, reduced them this year as their liquidity dried up

After the pandemic began, the company cut capital investment by $10 billion and said it could lay off up to 15% of its global workforce. This would involve around 14,000 positions, some of which are occupied by self-employed persons. Exxon also said it would cut its capital budget by between $16 billion and $19 billion next year

In 2021, even taking these cuts into account, Exxon would need a barrel price of between 55 and 65 dollars to be able to cover its capital expenditure and dividend, various analysts estimate.

Shell officially lowered its price forecast in June. The tanker now believes that Brent oil could reach $50 a barrel in 2022, before stabilizing at $60 in the long term. As a result, it announced that it would reduce the value of some of its oil and gas assets by 22 billion dollars. BP also lowered its price forecasts and depreciated its assets

In October, Exxon said it could reduce the value of its natural gas assets, valued at $30 billion, while saying that the depreciation did not indicate a change in its long-term pricing vision. In recent decades, the company has seldom reduced the value of its assets. For years, managers have asserted that the company is extremely careful in its investment decisions and that it selects financially profitable projects in any commodity price environment

But Exxon's position as a low-cost operator has eroded in recent years. Biraj Borkhataria, an analyst at RBC Capital Markets, believes that its break-even point is worse than that of any of its peers. He also believes that, given its current spending levels, its oil and gas production is about to decrease

In March, Woods told investors that Exxon had stress-tested based on numerous potential commodity prices. Some scenarios relied on cheap prices. If a barrel of oil were to stabilize around $50 a barrel for years, an assumption that Mr. Woods said was unlikely at the time, Exxon's debt levels would remain

“If we stayed in this unprecedented environment for five years, we would change our plans,” Woods said, however.

As part of an internal financial programming exercise this fall, Exxon lowered its oil price forecasts for each of the next seven years.