On Friday (August 14th), the Glasgow-based Weir Group saw share prices fall 1.6 per cent after a broker downgrade as commodity prices continue to fall.
Investment bank Liberum Capital lowered the engineering group's target stock price from £14.50 to £13.30. Analysts now believe that a fast recovery in oil and gas is "unlikely" due to the global oversupply of oil.
The International Energy Agency says that the oil glut is growing at "breakneck speeds". They estimate that supply is currently outstripping consumption by around three million barrels a day.
Last month, Weir, which primarily manufactures valves and pumps, reported a 40 per cent fall in first-half pre-tax profit.
Profit for the six months to June fell to £108 million from £182 million during the same period last year. In addition, overall first-half revenue fell by 13 per cent to £1 billion.
The company said that North American upstream activity had been hit by the downturn in the oil and gas markets. At the time, the company said it expected its financial performance to improve in the second half.
Weir has been working to improve its "cost competitiveness". Since November 2004, the firm has cut its North American oil and gas workforce by 32 per cent. It says the strategy should deliver annualised savings of £85 million by the end of this year.
Weir's power and industrial division also saw an 11 per cent drop in overall orders year-on-year.
Commenting on the six-month results, chief executive Keith Cochrane said: "This is the most severe downturn in oil and gas markets for nearly 30 years and as a result North American upstream activity has reduced substantially."
He acknowledged this has had a "significant impact" on the group's interim performance and said the firm was working to respond to the conditions effectively.
"However, with the normal seasonal bias of the Minerals and Power and Industrial divisions, increased restructuring benefits, further cost savings and a good contribution from recent acquisitions, we expect a meaningful sequential improvement in our financial performance in the second half of 2015, alongside continued strong cash generation," he added.
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