Author: Consultant

• Exxon raises 2024 oil and gas output goal to 4.3 million bpd
• Raises capital spending guidance to $28 billion for 2024
• Aims to cut cumulative $5 billion in costs through 2027

Aug 2 (Reuters) – Exxon Mobil (XOM.N), opens new tab on Friday posted a better than expected $9.2 billion second-quarter profit based on rising oil prices and volume gains from its purchase this year of shale oil firm Pioneer Natural Resources.

Exxon delivered a $2.14 per share profit that beat analysts’ estimates on oil production and pricing gains that offset refining weakness. Results mirrored profit beats by rivals BP, Shell and ConocoPhillips.

Higher profit “was driven by record production both in Guyana and in the Permian,” which offset lower natural gas and fuel prices, Chief Financial Officer Kathryn Mikells said.

Net income was $9.24 billion, up from $7.88 billion a year ago, largely on higher oil prices and gains from asset sales that offset weaker refining earnings.

Shares were up 1.3% in pre-market trading from $116.95 on Thursday.

The company warned the Golden Pass LNG joint venture development project stalled by the lead contractor’s bankruptcy would be delayed until late 2025. Exxon owns a 30% stake in the project and had earlier expected a first-half startup.

The profit boost from the Pioneer purchase highlighted how quickly Exxon was able complete the $60 billion deal compared to rivals. Chevron and ConocoPhillips’ acquisitions are still waiting on regulatory reviews. Chevron this week indicated the closing of its Hess purchase may not happen until the second half of next year.

Exxon, a partner with Hess in Guyana, has challenged Chevron’s deal and its arbitration claim should be resolved by September 2025, Mikells told Reuters in an interview, later than Chevron has signaled.

The top U.S. oil producer raised its 2024 output target by 13% to 4.3 million barrels of oil equivalent per day (boepd) following the Pioneer deal, Mikells said. Exxon produced 3.74 million boepd in 2023.

“We already see a line of sight of greater synergies” than expected when Exxon announced the transaction, Mikells said, adding that any updates would be disclosed in December.

REFINING WEAKER

Profits from pumping oil and gas jumped 25% over a year ago to $7.1 billion while those from the company’s gasoline and diesel business fell 32% to $946 million. Chemicals profits were flat at $779 million in the quarter.

Expenses rose modestly with capital spending of $7.03 billion, including $700 million in spending on assets acquired from Pioneer, up from $6.17 billion in the same quarter a year ago.

Exxon increased its annual capital expenditure guidance to $28 billion from the previously estimated $23-$25 billion.

The results also showed higher cash flow from operations which will help fund higher share buybacks and dividends. Cash flow from operations climbed to $10.5 billion, from $9.4 billion a year ago.

The company plans to buy back $19 billion in shares this year, the largest share repurchase program among its top Western rivals, up from $17.4 billion last year.

Oil and gas production in the second quarter grew by 15% from the previous quarter, or 574,000 boepd, including the added Pioneer contribution. Exxon had anticipated that Pioneer would add 500,000-550,000 boepd of output in the quarter.

Its Guyana operations, which were expected to produce about 600,000 boepd this year with partners, posted peak production in May, with a record of 663,000 boepd.

The company plans to deliver cumulative savings of $5 billion through the end of 2027 versus 2023, including $1 billion in cost cuts during the second quarter.

August 2, 20247:06 AM CDT

Global stocks dropped sharply on Friday, with richly-valued tech groups taking much of the pain, as investor anxiety about a U.S. economic slowdown sent shockwaves through markets already rattled by downbeat earnings updates from Amazon and Intel.

With thin summer trading likely exaggerating moves, a slump that began in Asia with a 5.8% drop for Japan’s Nikkei (.N225), opens new tab share index, its biggest daily fall since the March 2020 COVID-19 crisis, rippled through Europe and was set to continue on Wall Street later in the day.

MSCI’s broad gauge of global stocks (.MIWD00000PUS), opens new tab dropped 0.8%, Europe’s Stoxx share index (.STOXX), opens new tab fell 1.8%.

Futures trading implied Wall Street’s S&P 500 would open 1.2% lower and contracts that track the tech-heavy Nasdaq 100 index lost 1.8%, setting the gauge up for a 10% fall from its record closing high.

The VIX measure of U.S. stock market volatility, known as Wall Street’s fear gauge, rose to its highest reading since April (.VIX), opens new tab and U.S. Treasuries rallied as traders poured into the benchmark debt securities viewed as havens.

The sell-down followed a softer than expected U.S. factory activity survey on Thursday and came ahead of Friday’s monthly U.S. non-farm payrolls report, which economists forecast will show job growth dropped to 175,000 in July from 206,000 in June.

The U.S. Federal Reserve has kept benchmark borrowing costs at a 23-year high of 5.25%-5.50% for a year and some analysts believe the world’s most influential central bank may have kept monetary policy tight for too long, risking a recession.

“The historical experience is that turnarounds in the labour market can occur quickly and brutally and that relatively moderate increases in unemployment have been enough to trigger recessions in the United States,” SEB US economist Elisabet Kopelman said.

Money markets on Friday priced a 31% chance of the Fed, which is widely expected to cut rates in September and November, implementing a jumbo 50 basis points cut next month to insure against a downturn.

“That does feel like we have jumped the gun,” Fidelity International fixed income manager Shamil Gohil said.

He added, however, that “we will also be watching for a rise in the unemployment rate which will give us clues about a weaker labour market and as a potential recessionary signal.”

Shares in U.S. chipmaker Intel (INTC.O), opens new tab tumbled more than 20% lower in pre-market trading on Friday after the group suspended its dividend and revealed plans to cut 15% of its workforce.

Artificial intelligence chipmaker Nvidia (.NVDA), opens new tab, one of the biggest contributors to the tech rally, dropped 3% pre-market.

European tech stocks swooned 4.6% lower.

Nvidia, up more than 700% since January 2023, has left many asset managers with an outsized exposure to the fortunes of this single stock.

Steven Bell, chief economist for EMEA at asset manager Columbia Threadneedle, said that while investors were trimming big tech positions to rebalance their portfolios the U.S. was not about to contract.

“Personally, I’m not thinking I should run for the hills,” he said.

“This is a slowdown, not a recession. And the background of lower interest rates, lower inflation and real wages rising because inflation is falling faster than wage growth, all of that’s quite positive.”

Haven buying went full throttle on Friday, however.

The 10-year Treasury yield was 4 bps lower on the day 3.978% on Friday after dropping as much 14 bps overnight. Bond yields fall as prices of the securities rise.

The two-year yield , which typically reflects near-term interest rate expectations, dropped to 4.1244%.

The 10-year German bund yield, a benchmark for euro zone debt costs, fell 4 bps to 2.201%.

In foreign exchange markets, sterling was on track for a 1% weekly drop against the dollar as traders speculated that the Bank of England would follow its first rate cut of this cycle on Thursday with another in November.

Commodity markets broadly displayed global growth fears as gold added 0.7% to $2,464 an ounce and Brent crude oil , although slightly up on the day at $79.70 a barrel, headed for a fourth successive weekly loss.

Published: 8/2/2024 8:13 AM ET | 

The sell-off in equity markets triggered by economic growth concerns that followed the weak PMI data from the U.S is continuing unabated. Renewed political tensions in the Middle East and tech sector earning updates also swayed market sentiment.

Meanwhile, markets expect a decline in non-farm payroll additions and a steady unemployment rate in data to be released from the U.S. on Friday morning.

Wall Street Futures are trading deep in the red. European benchmarks also slumped. Asian stock indexes tumbled, tracking the sell-off in Wall Street while Nikkei plunged to a 6-month low.

Dollar Index weakened. Bond prices rallied and yields eased amidst the global meltdown in stocks. Crude oil prices edged up. Gold scaled fresh highs amidst rate cut hopes. Cryptocurrencies are trading on a weak note.

Here is a snapshot of the major world markets at this hour.

Stock Indexes:

DJIA (US30) at 40,031.00, down 0.79%
S&P 500 (US500) at 5,384.30, down 1.15%
Germany’s DAX at 17,789.35, down 1.64%
U.K.’s FTSE 100 at 8,255.90, down 0.33%
France’s CAC 40 at 7,314.25, down 0.76%
Euro Stoxx 50 at 4,688.55, down 1.62%
Japan’s Nikkei 225 at 35,917.50, down 5.73%
Australia’s S&P ASX 200 at 7,943.20, down 2.11%
China’s Shanghai Composite at 2,905.34, down 0.92%
Hong Kong’s Hang Seng at 16,945.51, down 2.08%

Currencies:

EUR/USD at 1.0831, up 0.37%
GBP/USD at 1.2742, up 0.02%
USD/JPY at 149.09, down 0.18%
AUD/USD at 0.6515, up 0.26%
USD/CAD at 1.3883, up 0.07%
Dollar Index at 104.07, down 0.34%

Ten-Year Govt Bond Yields:

U.S. at 3.928%, down 1.19%
Germany at 2.2010%, down 2.18%
France at 2.973%, down 0.64%
U.K. at 3.8860%, down 0.05%
Japan at 0.946%, down 1.46%

Commodities:

Brent Oil Futures (Oct) at $79.56, up 0.05%.
Crude Oil WTI Futures (Sep) at $76.34, up 0.0.04%.
Gold Futures (Dec) at $2,508.20, up 1.10%.

Cryptocurrencies:

Bitcoin at $64,660.55, up 0.23%
Ethereum at $3,153.42, down 1.08%
BNB at $573.64, up 0.22%
Solana at $164.65, down 2.76%
XRP at $0.5753, down 5.53%.

BCE Inc. says its earnings rose in the second quarter as it focused on cost management in a highly competitive environment, while adjusted earnings dipped.

The telecoms giant says earnings attributable to shareholders came in at $537 million, up from $329 million in the same quarter last year.

Earnings worked out to 59 cents a share for the quarter ending June 30, up from 37 cents a share last year.

The rise in profits came even as operating revenue of $6.01 billion was down slightly from $6.07 billion last year.

Bell says the increased profits were due to lower other expenses, including lower buying obligations, severance and acquisition costs.

The company says adjusted earnings were $712 million, or 78 cents per share, down slightly from $722 million, or 79 cents per share last year.

This report by The Canadian Press was first published August 1, 2024.

Cenovus Energy Inc. says it will be returning “substantially” more money to shareholders in upcoming quarters after achieving its debt reduction target.

The Calgary-based oil and gas company says in second-quarter results that it hit its net debt target of $4 billion in July and so will be returning 100% of excess free cash flow to shareholders starting in the third quarter.

The company says its second quarter earnings rose to $1 billion, up from $866 million in the same quarter last year.

Earnings worked out to 53 cents per diluted share, up from 44 cents from last year.

Cenovus says excess free funds flow in the quarter ending June 30 was $735 million, up from $505 million in the same quarter a year earlier.

The company reported revenues of $14.9 billion for the second quarter, up from $12.2 billion for the same quarter last year.

This report by The Canadian Press was first published August 1, 2024.

 Canadian Natural Resources Ltd. says earnings were up in the second quarter in part because of higher oil sales and prices.

The Calgary-based oil and gas producer says earnings were $1.72 billion for the quarter ending June 30, up from $1.46 billion for the same quarter last year.

Earnings worked out to 80 cents per diluted share, up from 66 cents last year.

Adjusted net earnings from operations were $1.89 billion, up from $1.26 billion last year.

The company says production volumes in the quarter were 1.29 million barrels of oil equivalent per day, up eight per cent from the same quarter last year.

Revenue was $9.05 billion for the quarter, up from $7.89 billion for the same quarter last year.

This report by The Canadian Press was first published Aug. 1, 2024.

TC Energy Corp. says it had a net income of $963 million in the second quarter, up from $250 million in the same quarter last year.

Earnings worked out to 93 cents per share for the quarter ending June 30, up from 24 cents per share for the same quarter last year.

The increase in earnings was due in part to a significant loss on its Canadian natural gas pipeline segment last year.

Adjusted earnings came in at $978 million, down slightly from $981 million for the same quarter last year.

Revenues were $4.09 billion, up from $3.83 billion for the same quarter last year.

The company declared a dividend of 96 cents per common share, up from the 93 cents it declared last year.

This report by The Canadian Press was first published Aug. 1, 2024.

Thomson Reuters says its earnings slipped in the second quarter while revenue rose and it edged up its revenue outlook.

The media giant says it had earnings of US$841 million in its second quarter, down from US$894 million last year.

It says earnings worked out to US$1.86 per share, down from US$1.90 per share last year.

The company says revenues of US$1.74 billion were up from US$1.65 billion for the same quarter last year.

Thomson Reuters says its operating profit was US$415 million, down from US$825 million last year, with the decrease in part because of a gain last year from a business sale.

The company says it expects total revenue growth for the year of around seven per cent, up from an earlier forecast of 6.5 per cent.

This report by The Canadian Press was first published Aug. 1, 2024.

• Hamas political leader Ismail Haniyeh was assassinated in Tehran.
• Iran’s paramilitary Revolutionary Guard accused Israel of carrying out the assassination.
• Iran’s supreme leader Ayatollah Ali Khamenei said it is Iran’s duty to punish Israel for this action.

https://www.cnbc.com/2024/07/31/brent-tops-80-per-barrel-as-analyst-flags-phase-of-deterioration-in-the-middle-east.html