Oil companies bid for more oil

• Oil companies are still bidding for more blocks despite near 50 % drop in crude price since last summer. Big oil companies chased for share in gild of Mexico that was up for leases on 18^th March.
  
  
• However the amount captured in lease were far less than previous. Lease sale generated $539 million in total high bids and $583 million in all offer placed. It is the lowest amount in at least a decade and far lower than last year's $851 million for similar sell.
  
  
• Mergers, buyout and acquisition of new fields remain attractive when the price is hovering at such a low. However rising tensions in Middle East and today's strike by Saudi Arabia over Yemen militia pushing the oil price higher.
  
  
• Brent is trading at $58.7/barrel. However a reversal is unlikely as supply still remains at large. Oil companies continued to chase select acreage for pricey sums in Central Gulf of Mexico on March 18 despite low oil prices, even though the total amounts captured in the lease sale were far less than in recent years.

Analogy -

• Lower crude prices have pushed the stock prices of the companies operating in the segment much lower. However larger companies are expected to ride through the current storm. So the stocks might hold value.
  
  
• However, since the oil companies usually take longer view when betting to acquire assets bid size shows, lot of pessimism is running within.