Breakingviews

Russia has levers to cope with oil squeeze

September 3, 2015

A low oil price will dent growth and public revenues, and Russia needs rebalancing. Yet President Vladimir Putin can hold the line by drawing on reserves and even inflating regional deficits, while the rouble’s fall helps competitiveness. That could enable a fragile equilibrium.

Miners’ dividends are a fragile commodity

August 25, 2015

BHP Billiton has raised its payout even as prices fall. That helps win investor support for its aggressive iron ore production strategy. Yet across the sector, funding generous payouts will become tough unless supply and demand rebalance. There is little to suggest they will.

Oil price slide complicates life for central banks

August 4, 2015

Brent is back down at $50 a barrel. Bond prices show this is eroding investor confidence that inflation will pick up. Central banks usually ignore the temporary impact of commodity price swings, but can’t afford to be complacent with inflation and policy rates already so low.

BP is making the best of a bad situation

July 28, 2015

Underlying profit at the UK oil major fell 64 percent. The lower oil price is the main culprit. Costs and capital expenditure are coming down, and operating cashflow remains resilient. But with the oil price falling again, BP has more challenges than opportunities.

Iran nuclear deal is huge potential step forward

By Edward Hadas
July 14, 2015

The hope is that the 100-page agreement will help keep oil cheap, spur rapid growth in the Iranian economy and lead to less fighting in the Middle East. But sanctions can be revived quickly if things don’t go to plan. Mistrust remains endemic. Optimists will have to be patient.

Oil is grounded in a sub-$60 bear market

July 7, 2015

Brent crude fell over 6 percent on the back of worries about Greece and the prospect of an Iran nuclear deal. The latter has a much bigger, if delayed, impact. As U.S. shale drillers cut costs fast and Saudi Arabia goes for volume, ample supply is likely to keep a lid on prices.

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.