Fossil Fuels

Oil’s feuding forecasters may both be wrong

15 May 2023

The International Energy Agency, which represents developed-world crude buyers, recently slammed producer club OPEC’s output cuts. Yet the pair share the same demand estimates for 2023. If they’re wrong, IEA fears and OPEC hopes of surging oil prices may prove wide of the mark.

Capital Calls: Amazon, Aramco

9 May 2023

Concise views on global finance: Rising costs and cautious consumers are driving the e-commerce giant to sell goods through mobile games and push incentives; the $2 trillion Saudi oil company’s new dividend policy is one way to interest investors in future share sales. 

Europe’s oil major sweet spot could yet turn sour

4 May 2023

Shell, BP and Total are still making fat profits, and investors seem fine with a slower route out of oil. Rising rates also make wind projects look even less enticing than fossil fuel ones. But longer term, Europe’s oil titans may lose their head start in the shift to net zero.

Capital Calls: BP, Japanese M&A

2 May 2023

Concise views on global finance: The oil giant will buy back $1.8 bln of shares over the next three months, which is less than investors hoped for; Astellas Pharma is making the most of cheap debt for its $5.9 bln pounce on U.S. eye-treatment specialist Iveric Bio.

Oil AGMs presage awkward investor decoupling

28 Apr 2023

BP sailed through its annual shareholder meeting without much blowback on how it had backtracked on climate goals. That will embolden competitors to dismiss pro-green investors’ concerns, and give more to the opposite camp. It is becoming harder to please both sides.

OPEC’s oil cut is less surprising than it looks

3 Apr 2023

The producer group’s shock call to slash output by another 1 mln daily barrels will annoy Joe Biden and spur inflation fears. But de facto leader Saudi Arabia had already shown it would ignore US wishes. And Chinese demand is sufficiently uncertain to justify pre-emptive action.

Ferrari’s green journey takes surprise turn

30 Mar 2023

Europe’s plan to support carbon-neutral fuels is good news for the $50 bln luxury carmaker, CEO Benedetto Vigna says on the Exchange podcast. It will allow the group to flog the roaring engines that made its fortune. Electric cars remain a goal, but self-driving Ferraris are not.

Europe throws ignition cars a thin lifeline

28 Mar 2023

A last-minute EU deal will exempt autos running on carbon-neutral propellants from a 2035 combustion engine ban. That may help sports carmakers like Ferrari. Such fuels are costly and energy-intensive. Brands betting big on electric rides, like VW, will struggle to change tack.

Economic asphyxiation puts Russia in China’s orbit

20 Mar 2023

Moscow needs up to $90 bln to fund its budget deficit this year. As sanctions keep biting, financing the shortfall will slowly add to the economy’s woes. Russia’s need to use the yuan for trade and payments will also increase Vladimir Putin’s dependence on Beijing.

Capital Calls: Ritchie Bros founder regret

13 Mar 2023

Concise views on global finance: The industrial equipment auction company’s $7 bln deal for scrap-yard operator IAA has drawn one last opponent: the company’s own co-founder.

Capital Calls: World Bank, Bumble, Wood Group

23 Feb 2023

Concise views on global finance: The U.S. picks ex-Mastercard boss Ajay Banga to run the multilateral development bank; while the dating app’s shares are down, private equity owner Blackstone is still in the money; the UK oil services group has turned down three bids from Apollo.

UAE gas IPO’s $50 bln valuation looks like a floor

22 Feb 2023

The Emirates’ energy giant ADNOC is selling at least 4% of its gas processing arm via an Abu Dhabi listing. As with Saudi Aramco, buyers will have to put up with minimal say on strategy. Unlike Aramco’s IPO, the mooted $50 bln valuation may be an underestimate.

IMF’s outlook on Russia is too rosy to be true

10 Feb 2023

The International Monetary Fund expects the Russian economy to avoid a recession this year after contracting by 2.2% in 2022. That is much more optimistic than Moscow’s own forecasts. Unless oil prices stage an improbable rally, investors should trust the locals’ gloomier view.

Big Oil mega-deals would put investors on the spot

2 Feb 2023

Shell and BP are printing money but have rock-bottom valuations. Punts by U.S. giants Exxon Mobil or Chevron are financially viable, if politically tricky. European shareholders may face a tough choice: sell out to a less green rival, or hope that risky renewable bets pay off.

Trying to bankrupt Russia could backfire

30 Jan 2023

Now that Western allies are supplying tanks to Ukraine, why not also ramp up sanctions on Russian oil and gas? Because doing so would carry big economic risks – and that could undermine Western willingness to continue its vital military support for Kyiv, says Hugo Dixon.

European gas savings success hides darker reality

27 Jan 2023

Spurred by soaring prices, the continent used 12% less of the fossil fuel in 2022. Despite a push to conserve energy, much of the drop was due to companies switching to other pollutants or shutting plants. Gas-hungry sectors like chemicals and steel face a protracted struggle.

Global energy prices face a turbulent 2023

12 Jan 2023

The cost of natural gas has halved from a peak last year thanks to warmer weather and bulky European stores. In this Viewsroom podcast, Breakingviews columnists discuss why it’s too early for companies and households to rule out further supply shocks and price volatility.

Capital Calls: California flooding

11 Jan 2023

Concise views on global finance: Heavy rainfalls have revealed the cracks in California lawmakers’ disaster spending measures, that have helped to prepare for fires and earthquakes.

Capital Calls: McDonald’s ex-CEO fine

10 Jan 2023

Concise views on global finance: The Security and Exchange Commission’s decision to slap former fast food chain boss Stephen Easterbrook with a penalty is a convoluted way to the right outcome.

Capital Calls: Rio Tinto, Grocery delivery M&A

9 Dec 2022

Concise views on global finance: After a shambolic process, the $118 bln miner has succeeded in buying out the 49% of Turquoise Hill Resources it doesn’t own; Turkish grocery delivery player Getir gobbles up German rival Gorillas for $1.2 bln.