Oil market rests on Saudi-Iranian output deal

November 24, 2015

Saudi Arabia says it will work with the world’s biggest oil producers to maintain price stability. To be effective, the OPEC kingpin will also have to make room for Iran to add barrels to the flooded market. The geopolitics are fast moving. But logic points to a deal.

Malaysia’s slashed oil dividend is still too high

November 12, 2015

State-owned Petronas will cut next year’s payout by 40 pct to $3.7 bln. That’s painful for a country which depends on the group for one third of federal revenues. But unless oil prices recover, or Petronas cuts costs, it will have to dip into cash reserves to finance the payout.

Qatar’s austerity drive will be felt beyond Doha

November 5, 2015

Despite being among the wealthiest people on the planet, Qataris must cut “wasteful” spending as low energy prices squeeze revenue, their ruler has warned. Years of high-profile investments including VW, Glencore and Barclays mean it may not just be Qataris who feel the pinch.

Oil funds misery may leak into global markets

November 4, 2015

Equity turbulence led to a loss for Norway’s wealth fund. Energy-dependent funds may in turn get their revenge. With oil prices low, governments are tempted to dip into hoarded wealth. And the funds themselves are becoming more apt to diversify away from financial assets.

Cheap oil no deterrent to Shell-BG deal

November 3, 2015

The Anglo-Dutch major says its bid for BG Group still works at mid-$60s oil thanks to higher expected synergies. Cheaper oil means BG is probably worth less too, but cost savings will help. The deal needs a recovery in oil prices sooner rather than later for it to work.

Conoco shows flexibility in oil’s awful year

October 29, 2015

The $66 bln crude producer cut capital-spending plans yet again as it reported a $1.1 bln loss in the third quarter. Low oil prices have yet to hit output, though. And CEO Ryan Lance is cutting other costs, too. Investors can take comfort from all that, but should still watch their dividends.

Energy subsidies will test Saudi’s pain threshold

October 29, 2015

The kingdom is considering how to claw back the $107 bln it foregoes each year by subsidising the price of domestic energy. Without that support, companies would be uncompetitive and subjects angry. But the impact of low oil prices makes giveaways an unaffordable luxury.

Shell throws kitchen sink at low oil

October 29, 2015

The Anglo-Dutch major’s quarterly results were scarred by a net charge of $7.9 billion. It’s painful, and the comparison with rival Total unflattering. Shell was able to cover dividends with cashflow in the last year, but the balancing act is only going to get more difficult.

Glencore ought to lift the lid on its blackest box

By Breakingviews Columnists
October 27, 2015

Investors seem unconvinced that the commodity trader’s $18 billion of inventory is as good as cash. The value of that hoard may have fallen by a fifth since last disclosed. Boss Ivan Glasenberg could allay concerns with better disclosure, but might put his trading edge at risk.

Self-help underpins BP’s $108 billion value

October 27, 2015

The UK-based oil major reckons it can fund its dividend organically by 2017 with oil at $60 a barrel. It is slashing operating costs and capital expenditure. It’s a big ask. BP’s forecast-busting third-quarter results provide comfort that it can pull it off.