Axios reports that oil and natural gas companies are staring down the barrel of a slowing economy, President Trump’s on-again-off-again Chinese trade war, persistently low oil prices that plunged Friday and even lower natural gas prices.
Where it stands: Big Oil’s second-quarter earnings are mixed this week. European majors Total, Eni and Shell reported large drops in profits while BP “bucked the trend.” And Saturday on this side of the Atlantic…
Driving the news:
- ExxonMobil “reported a 21% drop in quarterly profit on Friday, hit by weaker natural gas prices, lower refining profits and a loss in its U.S. chemicals business,” per Reuters.
- Chevron “reported a 26.3% rise in quarterly profit on Friday, as higher production more than offset lower prices and a rise in expenses,” according to Reuters, but revenue fell short of forecasts,Investing.com notes.
One level deeper: The oil market already took a hit after the Federal Reserve cut rates on Wednesday. A strong dollar typically weakens oil prices. Meanwhile, a lack of infrastructure like pipelines is hitting natural gas prices.
What’s next: More of the same.
- “Growth in oil supply is expected to accelerate next year as global production increases, keeping crude mired in a bear market,” The Wall Street Journal reports.
- “At the same time, anxiety about trade tensions crimping global growth and weakening demand has bolstered concern about a supply glut in recent months, investors say.”
But, but, but: Persistently low oil prices is good news for American consumers. That will likely make President Trump content in this area and keep tweets about oil prices at bay — which is probably good for everybody.