What: Shares of Marathon Oil (NYSE:MRO) did what just about every other independent oil & gas producer did in July, and that is lose a considerable amount of value in share price. Marathon was one of the harder-hit companies, though, as its stock declined more than 18% over the month.

So what: With oil prices for both domestic West Texas Intermediate and Brent dropping around 12% in the month of July to the $50 range for the first time since January, investors are getting really, really nervous about their positions in oil and gas producers yet again. I guess all of those reassurances from CEOs and media talking heads that we were going to see oil prices bounce back to $70 by the end of the year are starting to look a little bit stale in the mind of the market. 

At current prices, there isn't a whole lot Marathon Oil can do. It's been cutting spending and putting a large operational focus on its Eagle Ford Acreage. Even with the large cost savings headway the company has made recently, though, Marathon is, at best, breaking even with prices in the $50 range. 

One has to wonder whether Marathon Oil has any regrets about spinning off its downstream operations back in 2011. At the time, it was a great idea because it allowed each company to deliver capital expenditures targeted at each company, but today, that cushion of cash flow from downstream operations could really help to mask some of the issues on the upstream side of the business. 

Now what: In reality, not much has changed in terms of the company itself over the past month, it's all about what investors think oil prices will do to these companies over the next several months, and its pretty clear they don't like what they see.

Marathon's stock price will continue to wander at the whims of oil prices for quite some time, and unless there are some significant upticks in prices, the company may need to rethink even its most recent cost cutting actions. 

Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com or on Twitter @TylerCroweFool.

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