Skip to main content

Exxon hits record high.

 The US oil group’s earn­ings have high­lighted the wind­fall for Big Oil from Rus­sia’s war in Ukraine des­pite a fourth-

Exxon Mobil

quarter slow­ing of prices. Even though the fourth quarter was among the com­pany’s most prof­it­able ever recor­ded, it was down sharply from the record-break­ing $19.7bn earned in the third quarter, a sign that Big Oil’s earn­ings surge has decel­er­ated in recent months as oil and gas prices have fallen from near-record levels last sum­mer. Yet Dar­ren Woods, Exxon chief exec­ut­ive, warned that global oil and gas sup­plies were likely to remain tight because industry out­put is not «cov­er­ing the growth» of resur­gent demand. Sup­plies would be con­strained in part because «some of our com­pet­it­ors have stepped back their invest­ment », he said without identi­fy­ing the com­pet­it­ors.


Some Exxon peers such as BP, Shell and TotalEn­er­gies have said they plan to pull back their fossil fuel invest­ments in response to con­cerns over cli­mate change. Woods said Exxon «benefited from a favour­able mar­ket» but had also «bucked con­ven­tional wis­dom» by con­tinu­ing to invest dur­ing the pan­demic, which helped deliver «industry-lead­ing oper­at­ing and fin­an­cial res­ults and share­holder returns in 2022». Chev­ron, Exxon’s lead­ing US rival, repor­ted its own record earn­ings for 2022 of $35.5bn on Fri­day, put­ting the Amer­ican oil titans’ com­bined earn­ings for last year at an all-time high of more than $91bn, eclipsing the pre­vi­ous peak of $71bn in 2012. Oil prices have ral­lied in the past month over investor expect­a­tions that China’s eco­nomic reopen­ing will accel­er­ate crude demand growth while sanc­tions on Rus­sia weigh on global sup­plies.

Brent crude was trad­ing at $84.54 a bar­rel yes­ter­day after­noon, hav­ing fallen to about $75 in Decem­ber. In the US, Exxon­Mobil and Chev­ron col­lect­ively made more than $91bn in net income. Profit growth was already start­ing to decel­er­ate in the fourth quarter. Earn­ings are expec­ted to fall this year and next.

Exxon stock hit a new high last week after climb­ing some 160 per cent over two years. Chev­ron is also trad­ing near the record highs set in Novem­ber. Exxon has a con­trarian reason for stick­ing with its oil and gas busi­ness. It believes the world will con­sume more crude in 2050 than today.

That stands in con­trast to BP, which is pro­ject­ing a 25 per cent drop in demand by 2050. Des­pite the big run up in share prices, the energy sec­tor still accounts for just 5 per cent of the S&P 500. A dec­ade ago, it was more than 11 per cent.
Labels:

Comments

Post a Comment

Cloud Bookkeeping

HS2 cost cuts new routes and add delays.

 Trans­port depart­ment offi­cials have begun work on «Project Sil­ver­light» sug­gest­ing the high­speed rail scheme might face four addi­tional years of delay. The planned High Speed 2 rail line faces fur­ther delays of up to four years and more cuts to the project under plans being drawn up by min­is­ters to rein in its bal­loon­ing costs. The extra delays to the coun­try’s biggest infra­struc­ture project would mean that it would not be com­pleted until as late as 2045 — 12 years after ori­gin­ally planned. «This is a func­tion of infla­tion; we are hav­ing to find huge sav­ings because the cost of everything the depart­ment is already doing will have become so much more expens­ive by then,» said one gov­ern­ment offi­cial. In Octo­ber, the FT repor­ted that the Treas­ury had asked HS2’s man­age­ment team to identify poten­tial cuts or «scope reduc­tions» to the high-speed line. Trans­port depart­ment offi­cials have sub­sequently begun work on Project Sil­ver­light aimed at fi...
4 comments
Read more

Google has launched its Bard chat­bot.

  Google has launched its Bard chat­bot in a move to rival OpenAI’s pop­u­lar Chat­GPT, as it seeks to make up lost ground in the race to com­mer­cial­ise gen­er­at­ive arti­fi­cial intel­li­gence tech­no­logy. Google said that Bard, which provides answers to text­based ques­tions, will be run sep­ar­ately from its Google Search engine. In recent weeks, gen­er­at­ive AI has also been integ­rated into widely used pro­ductiv­ity applic­a­tions, such as Google’s Work­space includ­ing Google Docs and Gmail, and Microsoft’s Office 365 soft­ware, as well as into pop­u­lar apps such as Duolingo, allow­ing mil­lions of people to start inter­act­ing with the tech­no­logy. «We want to get feed­back and gradu­ally phase up the num­ber of people who have access to Bard, and the reason for that is we want to be able to test and learn from that before we roll it out very widely,» said Zoubin Ghahramani, vice-pres­id­ent of Google Research. Bard is built on top of Google’s AI tech­no­logy known a...
3 comments
Read more

Doubt on CS's collateral.

  Credit Suisse provided an emergency $140mn loan to Greensill Capital based partly on invoices to companies that deny ever doing the business stated on the documents. The Swiss bank provided the loan in October 2020, less than five months before the collapse of Greensill, a supply chain finance firm that counted former British prime minister David Cameron as a senior adviser. Invoices issued by metals magnate Sanjeev Gupta’s Liberty Commodities and sold to Greensill formed part of the collateral for the loan, according to documents seen by the Financial Times and people familiar with the transaction. Yet several of the parties named on the invoices have told the FT they did no business with Liberty. GFG has consistently denied any wrongdoing. Credit Suisse’s loan had a clause dictating that the collateral value had to be equal to or greater than the $140mn borrowed. The terms of the debt agreement only allowed invoices on Green-sill’s balance sheet to count towards this tally if t...
2 comments
Read more