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Occidental Petroleum Corporation
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Zambian economist Dambisa Moyo says it is "naive" to advocate for fossil fuel divestment, days after 17-year-old activist Greta Thunberg called on the world's elite to do so.
Occidental (OXY) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.
The Australian dollar rallied quite significantly during the trading session on Thursday, reaching towards the 200 day EMA as the jobs numbers came out much stronger than anticipated.
(Bloomberg Opinion) -- Kinder Morgan Inc. just issued the thrilling news that it plans to grow profits by 0% this year. That counts as a win in energy in 2020.The pipelines giant was something of a bellwether in late 2015 when it slashed its dividend and soon after did the same to its growth plans. This process reached a logical conclusion of sorts in the full year results presented Wednesday evening. After the usual bullish remarks about natural gas, management outlined a plan to keep spending tight so it could bump the divided up on flat Ebitda. Having chipped away at its debts over the past four years or so, several asset sales allowed leverage to dip a bit further. And even as the project backlog drifted lower, any scurrilous talk of M&A on the earnings call was quashed swiftly.This is your U.S. energy playbook for the foreseeable future, folks.Kinder isn't a bellwether this time; the shrinkage doctrine is cropping up all over. We've just been treated to a set of results from the big oilfield services companies best described as managed retreat. Like Kinder Morgan's gas commentary, Schlumberger Ltd. made its customarily upbeat remarks about the outlook for international drilling activity on its own earnings call last week. Yet the action items are largely a set of retrenchments: job cuts, technology franchising (read: asset-light) and exiting or potentially exiting commoditized businesses such as artificial lift, fracking equipment and drilling tools. Similarly, Halliburton Co. touted growth prospects overseas, while carrying out “initial personnel reductions and real estate rationalization” as its core U.S. land business continues to suffer. Both companies are back to trading at discounts last seen when the oil crash was only just getting underway.The contractors are taking their lead from their clients. Both ConocoPhillips and Chevron Corp. closed out 2019 with declarations of restraint; one via a strategy presentation and the other with a big write-down. Similarly, the shortest run of year-over-year job gains in the U.S. upstream business since 2002 effectively ended in November (see this). It’s tough for even this habitually upbeat industry to talk a big game when (a) natural gas prices are comatose in the middle of JANUARY and (b) despite a year’s worth of Middle East drama having been crammed into just a few weeks, oil futures are lower now than they were after that last supposed game-changer in Saudi Arabia back in September:Evident caution on the part of oil and gas enablers such as pipeline operators and rig contractors is a clear sign the mantra of reducing capital intensity is taking over. After a decade like the one just gone, with many billions wasted in pursuit of sheer market share, that is no bad thing. Plus, with efforts to address climate change — itself essentially a war on waste — this decade brings added pressure to run an extraordinarily tight ship.Old habits die hard, and not everyone gets it. But with E&P earnings season about to kick off, it is worth noting that Kinder Morgan, with guidance roughly as exciting as cocktail hour at a pipelines conference, leads the energy sector on Thursday morning.To contact the author of this story: Liam Denning at firstname.lastname@example.orgTo contact the editor responsible for this story: Mark Gongloff at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
PTC fiscal first-quarter earnings benefited from improvement in AR and IoT bookings. Moreover, synergies from Onshape acquisition aided growth.
(Bloomberg) -- Andres Manuel Lopez Obrador, who swept into power in Mexico after promising big changes in the country’s energy markets, has been careful not to spook investors by canceling past reforms outright.Instead, the Mexican president spent his first full year in office chipping away at them one piece at a time, slowing private investment but not bringing it to a halt.While the left-wing firebrand known as AMLO has suspended the country’s oil and gas auctions, he’s left existing contracts with global companies intact. More recently, he’s voided rules that would have made the fuel market more competitive, even as he’s let private fuel imports flourish. Now, he’s in the process of reviewing electricity contracts, but promising not to cancel them.It’s a mixed message that’s kept private investors from panicking, though they remain wary, according to Carlos Petersen, an analyst at Eurasia Group Ltd.“Lopez Obrador has been very strategic about not going after contracts that have already been awarded because he understands the repercussions that could have for Mexico’s reputation and investment,” Petersen said by telephone from New York. “That’s helped reduce some uncertainties. But the problem for the industry is what comes next.”Born in an oil town in the southeastern state of Tabasco, Lopez Obrador won the presidency in July 2018 vowing to strengthen Petroleos Mexicanos, Mexico’s debt-laden state oil company, as well as the beleaguered Federal Electricity Commission, known as CFE, by reversing the liberalizing reforms of his predecessor. But rather than trying to quickly ram through a huge new set of regulations, he’s moving cautiously toward his goal.The administration “understands that they don’t need to make a major legal overhaul of the energy sector to really achieve their goals, which are to strengthen and increase the role of the state-owned companies at the expense of private sector participation,” Petersen said.One of Lopez Obrador’s first moves as president was to call for a hiatus on Mexico’s competitive oil and gas auctions, the centerpiece of the 2014 legislative changes that ended Mexico’s eight-decade-long-state oil monopoly.Lopez Obrador said that the foreign firms that had won contracts -- including Royal Dutch Shell Plc, BP Plc, Exxon Mobil Corp. and Chevron Corp. -- must show results before new bidding rounds take place. It’s a move that comes in spite of the fact that many deep-water fields won’t start producing until after his presidential term ends in 2024.Tenders for joint-venture agreements between Pemex and private companies were also suspended, with the new administration opting for drilling service contracts awarded through a closed bidding process that favored local contractors.Lopez Obrador has replaced energy regulators aligned to the previous administration with his own team, helping to smooth the way for the government to strengthen Pemex and CFE by eliminating asymmetric fuel regulations and subsidies for private electricity companies.In December, the CRE granted Pemex a five-year extension on a clean fuel requirement that has enabled it to continue to sell polluting diesel in parts of the country. It also voided an agreement establishing price controls on fuels that Pemex sells to wholesalers, effectively allowing Pemex to price out the competition.Infrastructure SharingA rule requiring Pemex to share fuel infrastructure with private companies was also canceled. And now Lopez Obrador has promised to review electricity contracts that provide subsidies for private companies to generate renewable energy. That could see Mexico increase transmission costs for private companies and give the CFE preference over private generation when electricity is dispatched into the national grid.While there is a budding renewables market in Mexico, the sector took a hit after the government canceled the fourth long-term power auction early last year, with no plans to reschedule the bidding process until existing contract holders meet their commitments on power generation.“They have a lot of room to maneuver,” Petersen said. “Especially with the control they now have over not only the energy agencies and the executive power, but also over the regulators in the energy sector.”While many of those measures are likely to slow private investment, they won’t stop it entirely. Mexico’s needs are simply too big.Public-Private PartnershipThe government recognizes that private investment is important at the minimum for infrastructure development, and Lopez Obrador has said that new public-private partnership projects in the energy sector will be announced in February as part of a national infrastructure plan. These are expected to include pipelines, terminals, transmission lines and power plants.In the fuels market, private retailers are expanding their share of imports and investing in storage terminals. In November, companies other than Pemex imported around 107,000 barrels of gasoline a day into Mexico, almost three times as much as they did a year ago, accounting for 18% of total fuel imports.In the oil sector, there is a growing secondary market for the sale and purchase of privately-owned oil blocks, spurred in part by Lopez Obrador’s pledge to respect existing contracts. The U.K.’s Premier Oil Plc could sell its share of the world class Zama discovery. In October, Chevron purchased a 40% stake in three deep-water blocks in Mexico from Shell.“We are seeing a lot of activity on the secondary market, sales of stakes, swaps, and the arrival of new players,” said Alejandra Leon, an oil analyst at IHS Markit Ltd, speaking over the phone from Mexico City. “But the risk is that there are limited opportunities.”The challenge, she added, is to “maintain the dynamism of the industry when you don’t have new blocks being offered, when the climate is anti-reform, and when companies fear contradicting the president.”To contact the reporter on this story: Amy Stillman in Mexico City at firstname.lastname@example.orgTo contact the editors responsible for this story: David Marino at email@example.com, Reg Gale, Joe RyanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The employment report is good news for Australian Dollar bulls and discouraging news for short-sellers betting on a February rate cut. Now they have to reset the clock to April or May so selling the AUD/USD on rallies may not be sound advice unless the coronavirus scare spooks investors into dumping the currency because of Australia’s ties to China’s economy.
The British pound has flexed some muscle, as GBP/USD has climbed above the 1.31 line for the first time in two weeks. Will the upward move continue?
Employment figures give the Aussie a boost as the focus shifts to the ECB. Will Lagarde follow the BoC with a dovish outlook to sink the EUR?
The Australian dollar fell to test the previous downtrend line but bounced significantly from there to show signs of resiliency. The hammer that is trying to form is a good sign, and quite frankly it looks as if the Aussie is trying to save itself.
Enterprise Products Partners' (EPD) new Mentone cryogenic natural gas processing plant is set to help Permian producers to increase the commercialization of their products.
Although several large-cap stocks have skyrocketed in the past year, some of them are set to beat earnings estimate in the ongoing reporting cycle.
The Zacks Analyst Blog Highlights: Pioneer Natural Resources, Chevron, Talos Energy and Murphy Oil
(Bloomberg) -- Kuwait plans to restart oil production by March at the Wafra field that it shares with Saudi Arabia, more than four years after the neighbors halted output.Wafra has been shut since May 2015, due to a dispute over Saudi Arabia’s renewal of Chevron Corp.’s concession there. The field will resume pumping by March, Kuwaiti Oil Minister Khaled Al-Fadhel said Wednesday by phone.Kuwait’s parliament voted earlier in the day to ratify the agreement the country reached with Saudi Arabia in December to resume production at their shared oil deposits. Fields in the so-called neutral zone can produce as much as 500,000 barrels a day -- more than each of OPEC’s three smallest members pumped last month.Kuwaitis and Saudis alike have said a resumption would be unlikely to add significant amounts of oil to the market within the current duration of the Organization of Petroleum Exporting Countries’ production cuts deal, which runs until the end of March. The neutral zone, spanning more then 5,700 square kilometers (2,200 square miles), was created by a 1922 treaty between Kuwait and the fledgling Kingdom of Saudi Arabia. In the 1970s, the two Gulf Arab monarchies agreed to divide the area and incorporate each half into their respective territory while still sharing and jointly managing the zone’s petroleum wealth. The region contains two main oil fields: the onshore Wafra and offshore Khafji.Khafji was shut down in 2014 after a spat between the neighbors. The disagreement escalated over the Wafra field, when Saudi Arabia extended the original 60-year concession of the field, giving California-based Chevron, through its subsidiary Saudi Arabian Chevron Inc., rights there until 2039. Kuwait was unhappy over the announcement and claims Riyadh never consulted it about the extension.Chevron, which operates Wafra with Kuwait Gulf Oil Co., said in December that it expected full production there to be restored within 12 months.To contact the reporter on this story: Fiona MacDonald in Kuwait at firstname.lastname@example.orgTo contact the editors responsible for this story: Nayla Razzouk at email@example.com, Bruce Stanley, Amanda JordanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Back in 1999, one of the most talked-about scenes in one of the most talked-about movies involved a dancing plastic bag. It was surely a more innocent time. Still, two decades on from American Beauty and its bag-shaped pretensions, this is an opportune moment to reiterate that it’s just trash. China has unveiled plans to curb the use of non-degradable plastic bags in supermarkets and malls across major cities as well as food-delivery services. The problem with plastic isn’t plastic, much of which is useful and likely irreplaceable. Rather, it’s that we produce a lot of low-value but long-lasting plastic — especially packaging — that overwhelms our waste-management capabilities (or inclinations, for that matter) and winds up polluting the planet. Plastic bags blowing about in a fall breeze aren’t, as the movie contends, a metaphor for the hidden wonders of suburbia; they’re an expression of failure.As my colleague David Fickling writes, growing demand for petrochemicals is an article of faith in the oil and gas business, and one that gets a lot more airing these days to offset the disquieting narrative of electric vehicles stalling out gasoline consumption. In its most recent Energy Outlook, BP Plc identified “non-combusted” demand for oil as the single-biggest source of projected growth through 2040, with single-use plastics accounting for almost 40% of that 5.5 million barrels a day.Under an alternative future in which governments phase out single-use plastics aggressively and ban them altogether by 2040, BP’s outlook has global oil demand peaking in the late 2020s. That seemed like a far-off jetpack era back when we were watching dancing bags but now looms with humdrum imminence. This matters a lot because the oil industry plans to invest north of $34 billion a year in petrochemicals through 2024, according to estimates from Sanford C. Bernstein — equivalent to building the entire fixed asset base of a supermajor, Chevron Corp.China’s latest plan isn’t anywhere near a worldwide moratorium on Ziplocs. Yet it presents a risk that goes beyond this or that forecast for oil demand.It just so happens that a day or two after Beijing’s announcement, the Bank for International Settlements released a new report called “The Green Swan.” This lays out risks posed to the global financial system by climate change and the limitations of current models in quantifying potential impacts. One point raised is that while economists traditionally support carbon pricing to mitigate climate change, “given the size of the challenge ahead, carbon prices may need to skyrocket in a very short time span towards much higher levels than currently prevail.” In other words, we left it too long, so we now need to make carbon prohibitively expensive.Analogous to that is the act of just prohibiting stuff — which is where China’s new regulations come in. Those aren’t carbon-related per se, but the mechanism is the same. In theory, a mixture of price signals, recycling programs and consumer education could moderate the problem of plastic pollution. In practice, less than a fifth of plastic is recycled, a finding sometimes framed as a growth-driver for the industry. The relatively low value of the product, use of mixed plastics and general consumer confusion over what goes into what recycling bucket are big obstacles to getting that figure higher.Faced with that, more national and local governments are choosing to effectively set the “price” for certain plastics at some level tending to infinity by just banning them. In that sense, the difficulties of recycling may be less a bull argument for plastics and more a precursor to drastic measures.The resort to policies of interdiction, rather than market-led solutions, is itself a green swan: fiat dislocation that is hard to model. It doesn’t take a global ban on single-use plastics to present a problem to an oil industry that has (a) made petrochemicals a central part of its growth story and (b) begun deploying billions already in projects ranging from Saudi Arabian Oil Co.’s Asian joint ventures to Exxon Mobil Corp.’s shale-linked crackers on the Gulf coast.“To stop plastic use entirely will be hard, but to kill demand growth will require solutions for only 3% of global demand each year,” writes Kingsmill Bond, energy strategist at Carbon Tracker and co-author of a forthcoming report on the future of plastic demand. An ethylene plant running at 60% of capacity wouldn’t be stranded per se, but it wouldn’t be a must-own either.The cloud of uncertainty gathering over future oil demand raises the industry’s cost of capital, manifested in demands for higher cash payouts. BlackRock Inc.’s Larry Fink made much the same point in last week’s climate letter (including the potential for green swans, though he didn’t use that phrase). Today’s teenagers don’t sit around filming pollution; they head to Davos and lambast tycoons about it. In this sense, China’s bag ban may be less important for its specific impact on oil volumes and more for its general impact on expectations of growth and thereby sentiment and risk premiums for oil-related assets. Much as I hate to admit it, sometimes a bag is more than just a bag.To contact the author of this story: Liam Denning at firstname.lastname@example.orgTo contact the editor responsible for this story: Mark Gongloff at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.