U.S. fritters oil stockpile at worst time 1 Oct 2018 While President Trump chides OPEC, his Iran sanctions are pushing up prices. Meanwhile the government is selling down its stockpile to plug a budget hole, not calm the market. With shale producers constrained, the White House should be more strategic with its crude reserve.
Review: Shale oil exposé misses bigger picture 28 Sep 2018 In “Saudi America” Bethany McLean tackles the U.S. fracking industry. The author who spotted fraud at Enron accurately depicts aggressive wildcatters digging themselves to their demise. But factors that are pushing up global oil prices may yet save the industry from itself.
U.S. for once hits right note with Petrobras fine 27 Sep 2018 America’s foreign corruption laws often spark outrage about overreach. But penalizing the Brazilian state energy group $850 mln is a judicious result. It shows companies with ADSs will be held to account. And it mainly rewards Brazil’s authorities, which get 80 pct of the money.
Indonesia could grease economic wheels with oil 27 Sep 2018 Rising Brent prices and a falling rupiah have left the country choking on fuel costs. It was once an OPEC member and net exporter, but now imports almost $1 bln of crude monthly. Even with a fresh interest rate hike, Jakarta can take fiscal steps to ease its energy pain.
Oil could skim $100, albeit briefly 25 Sep 2018 The journey from $80 a barrel to three figures isn’t much of a leap. Shortages caused by U.S. sanctions on Iran make it plausible. Still, oil may not stay there so long as emerging markets remain shaky, the dollar stays strong, and President Trump wills it cheaper.
Elliott flexes its two biggest muscles at Sempra 18 Sep 2018 The $32 bln utility agreed to add two new board members and says it will review a break-up. Meanwhile, Elliott’s lawyers won back a $275 mln fee from when Sempra bought Texas utility Oncor. Paul Singer’s fund specializes in persuasion and litigation. This time, both paid off.
U.S. oil producers lose grip on global crown 14 Sep 2018 Fields in Texas were meant to help make the country a bigger exporter of black gold than Saudi next year. But pipeline construction is delayed longer just as American inventories are falling. U.S. drillers risk losing control of the market the longer logistics problems linger.
Latam can exorcise returning decades-old demons 12 Sep 2018 Argentina’s peso crisis and the stabbing of a far-right candidate in Brazil echo the region’s past economic instability and political violence. Mexico’s oil industry, too, may revisit the 1970s; Venezuela is in a totalitarian time warp. But history doesn’t have to repeat.
Shanghai’s early market win threatens oil duopoly 4 Sep 2018 In four months, China's new crude futures contract built up an impressive 7 pct share of global turnover. Currency risk is a worry, and foreign traders remain on the sidelines. Even so, with Iran’s help, Beijing is on the way to building a credible benchmark.
Latam’s market-friendly shift is at a parlous pass 27 Aug 2018 Argentina’s faltering growth imperils President Macri’s reforms. Mexico has delayed oil liberalization. Brazil’s main pro-business presidential candidate looks weak. Losing fiscal nous and foreign investment in the region’s biggest economies would hit business and the poor alike.
China’s oil majors risk wasting a good trade war 27 Aug 2018 Earnings are gushing at energy giants including $210 bln PetroChina. They are benefitting from Washington’s belligerence, which has driven up crude prices and should open opportunities in Iran. The windfall, though, masks the need for extra investment, cost cuts and other reform.
Norway and Saudi face two sides of same problem 24 Aug 2018 Oslo’s $1 trillion wealth fund wants to shed its oil and gas stocks, but a cautious government may not let it. Riyadh’s $250 billion equivalent wants steady growth, but the state may push it into leveraged, risky ventures. Both need more independence, and less political meddling.
Texan oil dominance teeters on shaky ground 23 Aug 2018 Shale oil helped the U.S. state’s main ports become an exporter of oil for the first time in April. Producers are basking in prices up around 40 percent in a year, and profits that encourage pumping. Tariffs, rising costs and the ease of closing the spigots can quickly change that.
Aramco’s failed IPO is a beginning not an end 22 Aug 2018 Saudi’s oil company has called off its $2 trillion stock listing. An army of investment bankers has been spared the need to sell an overambitious deal to unwelcoming markets. But there are plenty more Saudi deals to be done – which advisers will hope can be more easily executed.
West Texas mergers test shareholder blind faith 21 Aug 2018 A gush of mergers in the oil-rich Permian Basin region has totaled nearly $30 bln in a few months. Consolidation brings down costs, which have been rising. But high prices leave scant margin for error, and synergies may be overstated. “Trust us” strategies don’t suit wildcatters.
Oil investors are complacent on climate change 6 Aug 2018 Shareholders in the likes of Shell aren’t holding companies to account on carbon targets. A Breakingviews analysis suggests why: they may suffer only mild losses if oil majors just run down their reserves. But doing nothing may backfire if governments take more radical action.
BP starts to differentiate itself in a good way 31 Jul 2018 The UK oil major’s net profit beat expectations in the second quarter, in contrast to rivals like Shell and Exxon. BP is generating free cash, doing logical deals and hiking output. A 5.4 percent dividend yield reflects past Gulf of Mexico problems more than future potential.
Saudi’s Aramco plan B is too clever by half 27 Jul 2018 With the oil giant’s listing stalled, Riyadh wants to lever it up to buy a stake in chemicals group SABIC. It shouldn’t overburden Aramco, and offers a roundabout way of getting money to the state. But compared to an IPO it’s riskier, and does less to boost Saudi capital markets.
Exxon long-term view is more than short-term worry 27 Jul 2018 With declining production, the $360 bln group is missing out on current buoyant oil prices. Chevron’s second quarter likewise fell short, but along with European competitors it is boosting share buybacks. Exxon’s owners can justifiably fret about the industry’s uncertain future.
BP takes worthwhile gamble with shale deal 27 Jul 2018 The $10.5 bln that the oil major is paying for BHP’s U.S. shale assets is a full price and allows the miner to finally extricate itself from an expensive mistake. But BP is plugging a strategic gap and can easily cut costs. That makes the price appear more reasonable.