U.S. oil boom good for everything but profit 30 Jan 2019 Slowing growth and rising American production have knocked nearly 30 pct off Brent crude prices since October. Companies like Chevron and Exxon have responded by ramping up investment in the Permian, but that’s merely aggravating the glut – and making earnings growth elusive.
Abu Dhabi’s $6 bln oil deal is a three-way hedge 29 Jan 2019 The emirate has sold 35 pct of its oil group’s refining arm to two European producers. Italy’s Eni gets to offset a heavy reliance on exploration, while Austria’s OMV gets non-European refining. Abu Dhabi hedges its dependency on crude by turning crown jewels into cash.
U.S. intervention in Venezuela carries retro risk 28 Jan 2019 Uncle Sam is sanctioning state oil firm PDVSA in a bid to spur regime change. President Maduro’s woeful record has united much of the hemisphere in demanding his ouster. But a U.S. history of regional meddling means the Trump administration must avoid arrogance to retain allies.
Venezuela’s Maduro caught in pincer movement 23 Jan 2019 Protesters are demanding the socialist leader’s ouster. Opposition leader Juan Guaidó has, with U.S. blessing, declared himself interim president. But a self-inflicted wound will get Maduro in the end: By tanking oil output, he robbed himself of a key means of clinging to power.
Saudi’s sunny debt offer belies gathering clouds 10 Jan 2019 Riyadh’s successful $7.5 bln bond sale suggests investors have moved on from the Khashoggi murder. Yet long-dated Saudi debt trades at an implied discount to its rating. With the kingdom too optimistic about oil prices and facing peak demand, markets won’t always be so friendly.
Norwegian $800 mln oil swoop succeeds if it fails 8 Jan 2019 DNO, chaired by Bijan Mossavar-Rahmani, offered a low price for Faroe Petroleum. Investors could reject the bid, but the magnate likes to control companies with minority stakes, and already owns 31 pct of the North Sea driller. Any hopes for a big bump may be disappointed.
Hapless oil bets will drive airline M&A 4 Jan 2019 Air operators are divided into two camps on fuel prices. Ryanair and Lufthansa are prepared for a hike after locking in hedges. Smaller carriers are hoping for a fall. If their bet goes wrong, they could be gobbled up.
Saudi oil will grease China’s currency ambitions 4 Jan 2019 Shanghai’s crude contract is nibbling at dollar benchmarks: a win for Beijing, which wants to increase the yuan’s global clout. Riyadh can help it along by pricing more oil in the currency, as Russia moves in the same direction. The benefits for both sides outweigh the risks.
Hadas: Silly carbon tax talk hides hard choices 2 Jan 2019 The principle that higher prices reduce demand lies behind calls for levies on carbon dioxide emissions. But prices cannot do much in the large, complicated and economically crucial energy industry. Only big government, or major lifestyle adjustments, can really change things.
Brazil will get energy mostly right; Mexico won’t 28 Dec 2018 New regimes of opposing ideologies in Latam’s two biggest economies will wrestle with balancing 1970s-style nationalism against the need to open up to foreign and private capital to exploit their oil and gas resources. Brazil’s far-right president-elect has the better prospects.
China can afford some pipe dreams in 2019 20 Dec 2018 After years of speculation, Beijing will finally push behemoths like $200 bln PetroChina to spin off their pipelines next year. Allowing those oil and gas networks to run independently opens the field up to smaller competitors. It’s a major step towards energy market reform.
Trump can get what he wants from Saudi in 2019 14 Dec 2018 As the year closes, oil prices have fallen to well below highs that riled the U.S. president. The risk is OPEC supply cuts and sanctions on Iran will send them back up. Yet scope to influence the kingdom on output – as well as its behaviour in the region - gives him a hedge.
Hadas: What oil price volatility is trying to say 12 Dec 2018 A barrel of oil costs 31 pct less than in early October. The message is not about investment needs or a big demand shift. The tumble is big because the geopolitical racket makes lesser moves inaudible. Stock markets may also be speaking up.
Miners’ digging rush is a chance to show restraint 10 Dec 2018 Exploration, which stalled as prices crumbled after 2011, is back. Speculation over Rio Tinto’s drilling in Australia’s Great Sandy Desert, for example, has sent rivals on a copper-hunting frenzy. With deals scarce, such moves make sense, so long as the diggers stay disciplined.
OPEC condition upgraded from terminal to ailing 7 Dec 2018 The oil producers’ club agreed a 1.2 million bpd cut with allies like Russia, hiking prices. After Qatar’s exit, failure to do so would have destroyed the cartel’s credibility. But the details imply OPEC leader Saudi’s wishes are subordinate to those of Russia and the U.S.
Shell’s climate pay gesture lacks thermostat 3 Dec 2018 Linking executive bonuses to carbon targets, as the $258 billion giant has pledged to do, should focus bosses’ minds. Yet the goals and sums involved are unclear, and the plan only starts in 2020. Investors can do more to hold energy groups’ feet to the fire on emissions.
Qatar’s OPEC exit is a deft way to irritate Saudi 3 Dec 2018 Leaving the producer group is justified given big output calls are now taken by Riyadh and non-member Russia. Still, spurning a seat at the table is significant. It’s a way for Doha to flaunt gas riches, while implying a Saudi-led OPEC is increasingly chaotic and less relevant.
Saudi can pick a path through its OPEC minefield 27 Nov 2018 Riyadh must somehow please oil-producing peers who want to bolster prices and a U.S. president who wants the opposite. Crude costs will rise when Donald Trump’s temporary Iranian oil waivers expire. Saudi can appease both sides by making equally temporary reductions in output.
Trump’s Saudi amorality can make Gulf great again 26 Nov 2018 Support for Mohammed bin Salman after the murder of Jamal Khashoggi has skewered U.S. claims to moral leadership. Yet the U.S. president now has huge leverage to force Saudi’s crown prince to reverse course on Qatar, Yemen and other blunders. He would be a fool not to use it.
EasyJet valuation is heading for lower altitudes 20 Nov 2018 The budget airline carried a record number of passengers in 2018. That will be hard to replicate since rivals are finally resolving their problems. Stiffer competition and higher costs will weigh on revenue. The premium at which the company is trading over most peers will shrink.