The oil glut may be about to get worse. Global oversupply and weak demand dragged crude prices below $30 a barrel for the first time in 12 years earlier this month. Oil fell below $27 per barrel on Jan. 20, in anticipation of newly available Iranian supplies. While it has since rebounded to $32.18 per barrel (Jan. 22), prices could sink to $25 a barrel, energy analyst Tom Kloza told CNN Money. Without Wall Street intervention, history shows that number could even plunge to $10 a barrel, he added.

The recent easing of sanctions on Iran may trigger such a drop. International sanctions on the Persian Gulf country were lifted on Jan. 16, in response to Iranian concessions regarding its nuclear development program. That nation now plans to sell its massive stockpiles of crude on the international market.

Iran has been storing at least 30 million barrels of oil in offshore tankers. That number may be closer to 46 million, according to maritime data and analytics company Windward. Iranian supplies could add 300,000 barrels a day to the global oil supply by the end of the first quarter, and 600,000 barrels a day by mid-year, the International Energy Agency stated. Global oversupply could amount to roughly 1.5 million barrels a day in the first half of 2016, IEA projects.

Rig Count Remains Weak

Both oil and gas companies are continuing to slash activity amid plummeting commodity prices, as reflected by a new fall in rig count. Last month, the total number of rigs engaged in exploration and production for oil and natural gas in the U.S. sank below 700 for the first time since 1999. The tally dropped to 650 for the week ending Jan 15, 2016, according to the Baker Hughes rig count. This number is down by 14 from the previous week’s total.

While most of the decline was in natural gas, oil rigs also dipped by one unit to 515, after falling by 20 the previous week. That number is significantly lower than the 672 oil rigs reported when we first wrote about the rig count freefall in August. It is less than half the all-time peak of 1,609 seen in October 2014, and well below the 1,366 oil rigs active during the same time last year.

Oil rig count began to nosedive in December of 2014, due to global oversupply and depressed commodity prices. While China’s then-robust economy bolstered crude prices in 2015, analysts expect weak growth in Chinese demand this year, due to that country’s economic slowdown. Chinese oil demand will grow by only 420,000 barrels per day in 2016, compared to roughly 600,000 bpd last year, banking and financial services company Standard Chartered forecasts.

Rig count indicates the number of active rigs and serves as a barometer for the oil and gas industries. As prices drop and production becomes less profitable, companies scale back activity and temporarily shut down rigs. The cuts impact corporate earnings and industry employment. Tumbling energy stocks also influence the rest of the stock market, and have been dragging the indexes down with them.

The oil industry’s woes will continue through 2016, Moody’s Investors Services predicts. Under the current climate, exploration and production companies may fare better by paying down debt than investing in development or acquisitions, analysts at Raymond James & Associates Inc. stated this week.

Oil futures don’t expect a rebound above $50 per barrel until 2019, and prices could tumble even further in the meantime. “While the pace of stock-building eases in the second half of the year as supply from non-OPEC producers falls, unless something changes, the oil market could drown in oversupply,” the International Energy Agency warned in its January Oil Market Report. Prices “could go lower.”

Even if prices don’t nosedive that far, oil is likely to remain cheap at least through 2016, and consumers and most businesses stand to benefit. The outlook for the oil industry, however, remains gloomy. Activity, as reflected by rig count, is expected to remain depressed. Corporate earnings and stock prices will likely remain stunted along with it for the foreseeable future.

Companies to Watch

Halliburton Company (NYSE: HAL)?: Halliburton is the second-largest U.S. oil services provider. The company plans to purchase rival Baker Hughes Incorporated (NYSE: BHI), the oil services firm that has collected, calculated, and distributed the Baker Hughes Rig Counts since 1944. However, U.S. antitrust officials are unsatisfied with the concessions the companies have made, and have yet to sign off on the deal. In addition, the European Commission is investigating how the proposed merger may affect choice and prices in the EU. Halliburton is rated an outperform.

Schlumberger Limited (NYSE: SLB): The market leader in oilfield services. Schlumberger’s merger with Cameron International Corporation (NYSE:CAM), a small competitor, will likely close this quarter. The company has announced that it does not expect a recovery in demand before 2017. Consequently, Schlumberger plans to scale back activity in 2016. The company slashed 20,000 jobs globally last year, and has begun consolidating its manufacturing and distribution networks. Analysts expect Schlumberger to report an 8 percent drop in Q4 2015 quarterly earnings this Friday. The firm’s report will likely be a bellwether for the industry as a whole.

Nabors Industries Ltd. (NYSE: NBR): ?An onshore and offshore oil drilling and equipment company. Nabors’ net debt to trailing-12-month EBITDA (earnings before interest, tax, depreciation, and amortization) is a concern for some analysts. The figure has more than quadrupled in the past year. The figure could reflect insufficient earnings and available cash to repay debt, especially in light of tumbling oil prices. Nabors is rated a hold by research firm Jefferies.

Helmerich & Payne (NYSE: HP): Analysts rate this Tulsa, Oklahoma-based drilling contractor a hold.

Continental Resources, Inc. (NYSE: CLR): ?The largest leaseholder in the Bakken shale formation of North Dakota, and one of the many oil industry firms that reduced capital expenditures in 2015. As part of the cuts, Continental reduced its rig count in North Dakota and paused fracking of most wells. Despite the reduced budget, the company increased its output over 2014, partly owing to efficiency gains. Analyst consensus rates the company an outperform

Weatherford International (NYSE: WFT): Weatherford provides equipment and services for the drilling, evaluation, completion, production, and intervention of oil and natural gas wells in over 100 countries. Several hedge funds have recently bought and sold shares of the stock. Equity analysts at Wells Fargo upgraded Weatherford’s rating from a market perform to an outperform rating on January 18, The Fly reports. This rating aligns with analyst consensus.

Kate Dougherty is a freelance writer and geographer specializing in stories about where science, technology, and the environment meet. Her work has been published by Earth Island Journal Online, Next City, EnvironmentalScience.org, and the American Society for Mechanical Engineers. Prior to her freelance career, she was contracted to the U.S. Environmental Protection Agency libraries for six years, and also served as Assistant Professor/Geosciences and Maps Librarian at the University of Arkansas.