“La sabiduría de la vida consiste en la eliminación de lo no esencial. En reducir los problemas de la filosofía a unos pocos solamente: el goce del hogar, de la vida, de la naturaleza, de la cultura”.
Lin Yutang
Cervantes
Hoy es el día más hermoso de nuestra vida, querido Sancho; los obstáculos más grandes, nuestras propias indecisiones; nuestro enemigo más fuerte, el miedo al poderoso y a nosotros mismos; la cosa más fácil, equivocarnos; la más destructiva, la mentira y el egoísmo; la peor derrota, el desaliento; los defectos más peligrosos, la soberbia y el rencor; las sensaciones más gratas, la buena conciencia, el esfuerzo para ser mejores sin ser perfectos, y sobretodo, la disposición para hacer el bien y combatir la injusticia dondequiera que esté.
Several majors expected to post highest earnings in 3 quarters
Strong performance may not last as oil seen easing back to $40
For oil companies, the second quarter might be as good as it gets.
Shares
gained more than in any other industry, thanks to crude rising from a
12-year low. Profits were the best in at least three quarters for majors
including Royal Dutch Shell Plc, Chevron Corp. and BP Plc, helped by
cost cuts, analysts say. The rest of the year might not be as rosy as
supply holds near record levels.
The combined market value of the
world’s oil companies shrank by $2 trillion in the past two years
following crude’s collapse. While analysts agree the worst of the
oversupply is over, BNP Paribas SA and JBC Energy GmbH are among those
forecasting a slide back to $40 a barrel as output rebounds in Canada,
Iran, Nigeria and the U.S., hurting producers whose investment cuts have
put future growth in doubt.
“The
oil market has still to absorb higher supply from the return of
disrupted production,” Giovanni Staunovo, an analyst at UBS Group AG in
Zurich, said Thursday. “Oil prices could fall to $40 again.”
West
Texas Intermediate crude averaged $45.64 a barrel last quarter and
Brent $47.03, recovering from less than $28 for both grades earlier in
the year. The 89-member MSCI World Energy Index, led by Exxon Mobil
Corp., Chevron and Shell, rose 9.7 percent in the three-month period. It
beat the 5.2 percent advance of the next strongest sector, health care,
and the 0.3 percent gain of the MSCI World Index.
The last time
the energy index surpassed every other sector was in the second quarter
of 2014, just when oil’s slump was starting. Six months later, the index
turned out to be the worst performer of the year. Brent is down 9
percent this month and WTI 9.4 percent.
“The road ahead is far from smooth,” the International Energy Agency cautioned
July 13 as it said bloated stockpiles will continue to damp oil
prices. Inventories of crude and refined products in the U.S., the
biggest oil consumer, swelled to a record 1.385 billion barrels last
week, data from the Energy Information Administration show. For a wrap of analyst oil-price predictions, click here.
BP
will be the first of the five biggest non-state oil majors to announce
second-quarter earnings on July 26. Analysts surveyed by Bloomberg
estimate the company will post adjusted net income of $822 million, 37
percent lower than a year earlier but the highest in three quarters. Its
results are likely to indicate how the others will perform.
Shell
is expected to report adjusted profit of $2.24 billion on July 28,
according to the average of nine estimates. That would be the highest
since the second quarter of 2015. Total SA will also publish results
July 28, and Exxon and Chevron the following day.
Part
of the reason for the quarter-on-quarter gains is improved refining
margins. While oil’s lows led to losses at BP’s exploration and
production business in the past two quarters, they’ve driven up earnings
for its refineries, which benefit from cheaper crude. Global refining
margins averaged $13.80 a barrel in the quarter through June compared
with $10.50 in the preceding three months, according to the company’s website.Those
margins are now starting to contract, averaging $11.40 so far this
month. Refiners that ran their plants at full capacity earlier this year
made more gasoline than needed. There’s now such a glut
that at least five tankers hauling the fuel to New York were turned
away in the past month, according to ship-tracking data compiled by
Bloomberg.
“The more you build product inventories that are not absorbed by demand, the greater
the pressure will be on refining margins and thus crude-oil demand,”
said Harry Tchilinguirian, head of commodities research at BNP Paribas
SA in London. “Fundamental downward pressure on oil is not yet lifted.”
Chevron
probably will post quarterly net income of $514.2 million, based on the
average estimate from 12 analysts. While that’s 9.9 percent lower than a
year earlier, it compares with losses in the prior two quarters.
Exxon’s
profit probably declined 38 percent from a year earlier to $2.6
billion, 12 analyst estimates show. Earnings may have gained 44 percent
from the previous quarter but were down 6.5 percent from two periods
ago.
Major oil companies still enjoy the benefit of growing demand for their crude. World oil consumption
will rise to 100.5 million barrels a day in 2020, up 6.5 percent from
last year, the IEA said in February. Yet belt-tightening across the
industry in the past two years -- including project cancellations and
thousands of job cuts -- may limit their ability to exploit this
expanding market.
Oil and gas companies will slash
$1 trillion from planned spending on exploration and development from
2015 to 2020, slowing growth in production, according to consulting firm
Wood Mackenzie Ltd.
Swings in the oil price mean it’s still
difficult for energy companies to plan for the future, according
to Shell Chief Executive Officer Ben Van Beurden, who predicts
volatility will persist for the next few years.
“If we get to a
point where we do not see a better recovery of the oil prices, therefore
a better balance in our finances, we will be very much minded to defer
projects,” he said earlier this month in London.
