• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
Celebrating our 1,000th edition. The climate news you need
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  FEATURED
Ex-Fossil Workers Convert Old Oilfields to Solar Farms After ‘Rapid Upskilling’ in Alberta June 29, 2022
London Becomes Biggest City to Sign Fossil Fuel Non-Proliferation Treaty June 29, 2022
G7 Miss ‘Golden Opportunity’, Walk Back Pledge to Cut International Fossil Finance June 29, 2022
Soaring Fertilizer Prices Could Deliver ‘Silver Lining’ For Emissions, But Farmers Struggle to Limit Use June 26, 2022
BREAKING: UN Nature Summit, the ‘Paris Conference for Biodiversity’, Moves to Montreal in December June 19, 2022
Next
Prev
Home Climate & Society Energy / Carbon Pricing & Economics

Big Market Drop Cuts Oil Prices as Big Fossils Miss Profit Targets

February 7, 2018
Reading time: 4 minutes
Primary Author: Mitchell Beer @mitchellbeer

Gina Dittmer/PublicDomainPictures

Gina Dittmer/PublicDomainPictures

 

A spot of turmoil in financial markets brought world oil prices to a two-week low this week, and some analysts saw potential for prices to fall further still, just days after at least two major fossils reported missing their quarterly profit targets.

The numbers were a splash of cold water for an industry that had been growing at a gradual recovery in world prices, with some reports suggesting oil could reach US$80 per barrel in the foreseeable future. Earlier this week, as the Dow Jones Industrial Average plummeted 1,175 points, its biggest loss in 6½ years, benchmark West Texas Intermediate (WTI) crude oil was down 2% to $64.15 per barrel, while Brent crude fell 1.4% to $67.62.

While the price dip had little to do with the oil market itself, it pointed to fossils’ dependence on wider economic trends and investor expectations over which they have little or no control.

“This was crowd psychology at its best,” Adviser Investments CEO Daniel Wiener told the Washington Post. “Investors had the weekend to worry about what happened Friday, and they sold on Monday. This is normal, everyday stock market volatility. And it’s healthy.”

“When something becomes too good, we know it’s about to end in tears,” agreed Ole Hansen, head of commodity strategy at Saxon Bank. “And the market has almost become too perfect in the last few months.” Elements of that fatal perfection apparently included a strong U.S. dollar, rising wages, higher employment, and increased oil and gas production, all leading investors to sell of a bunch of stock in anticipation of higher interest rates for borrowed investment capital.

The result, according to the Seeking Alpha investment blog: ExxonMobil shares fell 5.7% on Monday, Chevron Corporation by 5.3%, BP by 4.4%, Kinder Morgan by 3.5%, and Energy Transfer Partners by 2%, among many other losers.

“The stock market and interest rates can really affect oil a lot,” explained Mark Waggoner, president of Excel Futures. “It’s spilling over into the energy markets and causing these ripple effects.” And oil market analysts at Texarkana, Texas-based TAC Energy said the price decline could continue.

“The potential is present for a big move lower should fear return to the stock market and spark liquidations across the board,” they stated Friday, before Monday’s market losses.

PVM Oil Associates analysts Tames Virga and Stephen Greenock saw a global sell-off of risky assets “gathering pace and sending the energy complex lower amid a sea of red,” even as U.S. fossils continued to put more drilling rigs into operation. “There is only limited fundamental justification for the high price level,” added Frankfurt-based financial services company Commerzbank A.G. “It is therefore conceivable that the correction in oil prices will continue.”

Meanwhile, Exxon and Chevron both reported lower-than-expected profits last week, with Exxon losing 3.6% in share value as investors absorbed the news. The company’s quarterly report showed “falling production and weakness in its chemical and refining operations,” Reuters reports. “There were pretty weak cash flow numbers,” said London-based analyst Jason Gamely of Jeffries LLC. “It was a pretty big miss.” By Monday, Bloomberg was reporting an overall 10.3% drop in Exxon stock, “the driller’s steepest two-day plunge since August 2015.”

Even so, the colossal fossil’s results would have been considerably worse if not for the massive gift it received through Donald Trump’s recent tax reform package, reports the Institute for Energy Economics and Financial Analysis. “Without the benefit of recent tax reform, the company’s quarterly earnings would have been nearly flat, and the company would have lost money in its U.S. upstream operations,” write Director of Finance Tom Manzullo and Kathy Hippie, founding partner at No sphere Marketing.

“Exxon is depending on rising global prices to earn a profit while having increasing difficulty in translating higher oil prices into higher profits,” they add. “For long-term investors, this was Exxon’s twelfth consecutive quarterly loss in its U.S. drilling business.”

Exxon’s Canadian subsidiary, Imperial Oil, also missed its quarterly profit target and saw its share price fall about 4%, Reuters reports.



in Energy / Carbon Pricing & Economics

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

David/flickr
United States

U.S. Supreme Court Expected to Gut Emission Controls as Climate Scientists Petition for Plan B

June 26, 2022
1.2k
Graco/Facebook
Food Security

Soaring Fertilizer Prices Could Deliver ‘Silver Lining’ For Emissions, But Farmers Struggle to Limit Use

June 27, 2022
212
willenhallwench / Pixabay
Clean Electricity Grid

PG&E Risks Greenwashing with Definition of ‘Scope 4’ Emissions

June 24, 2022
98

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

François GOGLINS/wikimedia commons

Corrosion Problem Shutters Half of France’s Nuclear Reactors

June 29, 2022
227
Keith Hirsche

Ex-Fossil Workers Convert Old Oilfields to Solar Farms After ‘Rapid Upskilling’ in Alberta

June 29, 2022
411
Danielle Scott/flickr

Advocate Urges Ottawa to Intervene Before Ontario Builds Highway 413

June 29, 2022
130
David/flickr

U.S. Supreme Court Expected to Gut Emission Controls as Climate Scientists Petition for Plan B

June 26, 2022
1.2k
Number 10/flickr

G7 Miss ‘Golden Opportunity’, Walk Back Pledge to Cut International Fossil Finance

June 29, 2022
146
London Eye UK England

London Becomes Biggest City to Sign Fossil Fuel Non-Proliferation Treaty

June 29, 2022
131

Recent Posts

AJEL / Pixabay

Windfall Tax on Food, Fossil, Pharma Giants Would Raise $490B to Solve ‘Catastrophic’ Food Crisis: Oxfam

June 29, 2022
58
futureatlas.com/flickr

Ottawa Demands Deeper Fuel Emissions Cuts, Offers Fossils a Double-Dip on Tax Breaks

June 29, 2022
78
Province of B.C./flickr

Comox Joins Municipalities Seeking Ban on New Gas Stations

June 29, 2022
78
/Piqsels

Refocus Agriculture Spending to Cut Emissions, Boost Productivity, OECD Urges Governments

June 29, 2022
29
Jimmy Emerson, DVM/flickr

Public Vigilance Key to Protecting Greenbelts for Climate Resilience, Report Finds

June 29, 2022
36
Miguel V/Wikimedia Commons

Forests Fall Short of Full Carbon Storage Potential, Study Finds

June 29, 2022
64
Next Post
EmilianDanaila/pixabay

Oceans Mark Hottest Year On Record in 2017

The Energy Mix

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Navigate Site

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Follow Us

No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}