Breakingviews

Why $65 per barrel oil looks like a ceiling, not a floor

June 1, 2015

Most industry observers expect a slow climb from the current levels. But global supply is rising, as U.S. shale drillers cut costs fast and Saudi Arabia and others go for volume. With non-U.S. shale on the horizon, $65 a barrel for Brent looks more like a ceiling than a floor.

BP and Total find downstream respite

April 28, 2015

Strong results in refining and marketing limited the profit fall at the two European majors. With the oil price down, the gains are especially welcome. But downstream overcapacity will bite in the medium term, while upstream businesses remain hostage to the oil market.

Shell-BG highlights rise of the micro-boutiques

April 8, 2015

The $70 bln deal needed just three advisers: Merrill, Goldman, and minnow Robey Warshaw. Rivals like Zaoui & Co have also won major mandates. For big M&A shops, two worrying trends are intersecting: CEOs seem ready to hire fewer banks per deal and to use much smaller outfits.

Royal Dutch Shell and BG open mega-deal pipeline

April 8, 2015

The $200 bln energy giant is in advanced talks to buy its $46 bln gas rival. It could be an opportunistic move for Shell, whose vulnerable target has a new CEO. There could yet be other suitors for BG. Any deal is also bound to kick off other big transactions in the sector.

Iran deal moves oil closer to long bear market

By Edward Hadas
April 7, 2015

A framework deal to curb Iran’s nuclear program is likely to bring the country’s oil exports way up. Like Saudi Arabia, Iran gains more from market share than it loses from low prices. Higher-cost producers will take time to adjust.

Monetary mess threatens gains from oil oversupply

January 27, 2015

Too much production accounts for about half of the oil price slide, by one calculation. The surplus of cheap crude should boost oil-importers’ GDP. But the gains may not materialise, thanks to central banks’ ultra-low interest rates and wobbling anti-deflation credentials.

Cheap oil comes with hidden risks for airlines

January 19, 2015

Falling oil prices cut airlines’ fuel bills and will lift earnings this year. European carriers’ share prices are up, but weaker players will find it easier to stay in business so needed consolidation may slow down. Excess capacity could soon put pressure on ticket prices.

Guest view: Hard to spell Colombia without o-i-l

By Guest Contributor
January 15, 2015

The U.S. miner’s $138 mln check to resolve a lawsuit over conflicts-riddled deals sets a precedent that gives shareholders more clout. It should turn up the heat on Chairman James Moffett, whose cross-holdings factored in the case. Better governance would enhance the big payout.

Oil price floor could be a long way down

By Edward Hadas
January 13, 2015

Petro-economics are painfully simple for producers. Lower prices hardly push up demand. And it will take a price below $30 a barrel before supply falls enough to balance the market. Unless producers can regroup into an effective cartel, their suffering will continue.

Cheap oil lubricates Li Ka-shing’s corporate rejig

January 12, 2015

Asia’s richest man is shifting a 6 pct stake in Canada’s Husky Energy to his holding company as part of a broader shake-up. The move is vital to keeping Li’s grip on the telco-to-property empire. Though shareholders may object, the falling oil price has worked in their favour.