Fossil Fuels

Corona Capital: Uncle Sam’s penchant for boutiques

2 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. The U.S. government has given a boost to independent investment banks by hiring Moelis. Perella Weinberg and PJT are its bailout advisers. Megabanks like JPMorgan and Goldman Sachs, meanwhile, are left on the shelf.

Rosneft Venezuela exit is not as good as it looks

30 Mar 2020

The $41 bln oil giant is selling its operations in the country to the Russian state to avoid more sanctions. Moscow is making a generous share payment but in practice keeps voting control. It’s a cheap way for the government to protect a key asset and send a message to the U.S.

Oil storage crisis is new threat to OPEC

25 Mar 2020

The double whammy of a Saudi Arabia-led price war and a virus-fuelled collapse in demand points to a huge oversupply of crude this year. Space to store the surplus may run out at this rate. If that’s exhausted, a barrel of the commodity could soon be worth less than $20.

Oil price war bolsters case for U.S. renewables

24 Mar 2020

The Saudi-Russia black-gold spat has drilled a hole in American energy suppliers’ finances and the country’s hopes for energy independence. Bailing out fossil-fuel companies is an option, but a more decisive switch to cleaner energy could make self-sufficiency an attainable goal.

Trump can make oil markets balance in his favour

20 Mar 2020

To hike low crude prices, the U.S. President needs a big producer to cut supply. He already has leverage over Saudi Arabia and more scope to threaten Russia with sanctions. Add in output curbs by shale, and a path exists to keep American producers afloat but oil values in check.

Oxy victory would help Icahn’s poor oil-patch rep

12 Mar 2020

By raising his stake in Occidental Petroleum, the activist has upped the odds of getting his way, or reaching a truce. It helps that his demands – a new CEO and a sale of the company – both make sense. A trail of rocky energy investments means Icahn could use a high-profile win.

Viewsroom: Oil shock

12 Mar 2020

A major rift between Saudi Arabia and Russia has sent oil prices plummeting just as the Covid-19 outbreak saps demand. The fallout is pummeling U.S. shale producers and calling traditional energy-security concepts into question. Plus, market fallout in Japan, China and India.

Occidental divi cut puts Buffett in driver’s seat

10 Mar 2020

The oil driller slashed its payout in response to crude prices plummeting. That is the last straw for CEO Vicki Hollub, who staked her credibility on a debt-fuelled purchase of Anadarko. Oxy now looks like an appealing M&A morsel, though all hangs on kingmaker Warren Buffett.

Oil slump puts African states on devaluation hook

10 Mar 2020

Hydrocarbons account for 90% of exports in Nigeria and Angola, despite years of talk about diversification. With crude at $36 a barrel, they’re both in trouble. Speedy devaluation means inflation-related pain but should help make the shift to a greener, low-carbon future.

Big Oil’s wipeout invites a new sort of activist

9 Mar 2020

Plunging crude prices have sent BP shares down 20%, with Shell and Total close behind. The rout could make it harder for oil majors to shift away from fossil fuels. Dirt-cheap valuations offer a way for activists to push CEOs to cut investment and return cash to shareholders.

Saudi sets global oil a stress test few will pass

9 Mar 2020

An all-out price war launched by the kingdom crashed the crude price over 20%. Values well below $40 a barrel are a setback for U.S. shale producers, global oil majors, national budgets, and the climate change fight. At least Saudi oil giant Aramco will share the short-term pain.

OPEC Russian roulette yields circular firing squad

6 Mar 2020

Moscow has rejected the cartel’s pleas for a supply cut to ease a virus-linked demand slump. Given the scale of the oil market imbalance, an inadequate deal was the best that could have been hoped for. But OPEC’s efforts to force the issue look like leaving everyone worse off.

Exxon positions as the climate-doubter’s choice

5 Mar 2020

Boss Darren Woods has reaffirmed he is actively pursuing fossil-fuel projects as rivals cut back. Success would bolster Exxon’s dismal returns. But Woods’ faith in Big Oil’s longevity makes the U.S. oil giant something of an outlier. At least investors have options.

Oil’s plunge ratchets up “peak crude” anxiety

2 Mar 2020

The spread of coronavirus has contributed to a one-quarter plunge in oil prices, and even torpedoed the industry’s global pow-wow in Houston. Demand could decline for the first time in a decade. This new demand shock will steal valuable time from companies preparing for peak oil.

Texas becomes oil vampire squid

21 Feb 2020

Even though fracking doesn’t produce corporate profits, the Lone Star state’s plentiful oil continues to attract investment. That’s been a boon for state coffers. But much like OPEC, U.S. drillers elsewhere are feeling the squeeze. Texas’s success is at the expense of others.

Viewsroom: BP, Delta shift out of climate neutral

20 Feb 2020

The British fossil-fuel giant and the largest U.S. airline have each pledged to effectively stop emitting carbon over time. The ambition is encouraging and puts them ahead of most rivals. But both fall short on all-important details. There’s plenty of runway to do better.

Rosneft’s sanctions yellow card won’t turn red

19 Feb 2020

The Russian oil giant’s trading subsidiary is the target of the toughest form of U.S. sanctions over Venezuela. Unlike 2018 curbs on Rusal and En+, it shouldn’t hurt Rosneft much. Tougher measures are unlikely given the unwanted surge they might trigger in oil prices.

Glencore split could spring-clean dusty valuation

18 Feb 2020

The commodity giant’s coal operations dragged in 2019. Spinning them off into a separate entity would underline the low-carbon potential of the copper and cobalt assets left behind. That could leave billionaire CEO Ivan Glasenberg with a more valuable overall cake.

BP leaves investors in a better sort of limbo

12 Feb 2020

New boss Bernard Looney has unveiled ambitions to largely eliminate the oil giant’s net carbon emissions by 2050. That’s more enlightened than most peers, and better than previous goals. But without a clear road map, shareholders can’t work out what the company will be worth.

Virus reveals China as global oil’s swing consumer

6 Feb 2020

Saudi Arabia may cut output to offset a demand slump due to the coronavirus. The People’s Republic’s thirst for imported oil, and uncertainty about the length and severity of the crisis, make that a tricky call. Getting it wrong risks opening the door to other exporters.