Downhill For Sweet Crude oil Major industries?
All eyes are on oil majors since the fall of refining battle. though the industry is 20% increasing, the refineries are struggling to demand remains weak and the cost of input - oil - continues to rise.Most companies are betting on a rebound in oil prices to offset the results of refining dejuction. The results put the focus to the wells due to come on line in the up coming months.The earnings of this quarter from oil majors like Exxon Mobil Corp. and BP Plc, to be published this week, will focus on its integrated structure. BP reports results on Tuesday, followed on Wednesday by Conoco, Exxon and Shell on Thursday and Chevron on Friday.
Good news for oil producers U.S. oil prices is above$ 80 a barrel for the first time in a year.Just over half a year ago, it leveled at $68 per barrel,but 13% above the second quarter.Few hoping for a dramatic recovery in global demand for petroleum products next year,as oil majors also encountered by a difficult decisions about what to do with the excess refinery capacity and refiners.Olivier Jakob of Switzerland’s Petromatrix said high oil prices could encourage some producers to increase production.
Reflecting the fall in prices year after year, Exxon, the largest global private company in the petroleum sector is expected to report 63 percent decline in earnings of 4.94 billion U.S. dollars, according to the average Thomson Reuters.”We want to ensure that projects in the queue are going as planned and is expected to be growth of production in 2010,” said Neal Shah, an energy analyst with First American Funds in Milwaukee, Wisconsin.
It’s a similar story for BP, with a Reuters poll of six analysts give an average estimate of net profit of U.S. $ 3.2 million in the quarter, up 64 percent over the same period in 2008.While The Anglo-Dutch giant Royal Dutch Shell, based on the average among some analysts, is expected to show comparable net profit of U.S. $ 2.5 million, less than 69% from a year ago.”It will tell whether these “supermajors” are true supermajors” said Tina Vital from S&P Equity Research.
Oil Cazenove analyst Fred Lucas wrote in a research note that London-based BP management may suggest the possibility that lower capital spending in 2010.
CONOCOPHILLIPS : 51.97 (-0.96)
CHEVRON CORP : 76.68 (-0.61)
OCCIDENTAL PET : 82.15 (-1.85)
ROYAL DUTCH SHELL-A: 20.80 (-0.08)
ROYAL DUTCH SHELL-B: 1852.50 (+15.00)
SCHLUMBERGER LTD : 65.20 (-3.40)
EXXON MOBIL CP : 73.57 (-0.87)
A key test will come from their refining businesses, with benchmark margins off 54% on the US Gulf Coast and down 60 per cent in both Northwest Europe and Singapore
Most commodities have been reacting to the fear of deflation. The crude oil was no exception. The gold has not suffered much, however, given that is perceived as a form of money and during periods of deflation.Thus, crude oil decrease much more than gold and gold/ oil price combination moved away from any trend. Important note: prices tend to eventually revert to their means.