OIL MAJORS REPORT RECORD LOSSES

ExxonMobil, the world’s second-largest oil company, reported its fourth quarterly loss in a row for the last three months of 2020, tallying a $22.4-billion loss for the year, the first negative year in the company’s 150-year history.

The company’s stock lost more than 40 percent of its value last year, during which ExxonMobil was booted out of the S&P 500 index and replaced by Tesla.

British giant BP booked a loss of $5.7 billion in 2020, compared to 2019's $10-billion profit. It was the company's first losing year since 2010 when its Deepwater Horizon platform exploded in the Gulf of Mexico.

ConocoPhillips lost $2.7 billion last year against a 2019 profit of $7.2 billion.

Royal Dutch Shell and French company Total are expected to report losses this week.

As the pandemic shut down the world’s economy in spring 2020, petroleum companies continued to pump oil, despite a crash in demand amid a glutted market. U.S. crude futures briefly traded below zero at one point last spring, with benchmark Brent crude prices spending weeks in the $30 range before rebounding now to pre-pandemic levels of about $60 a barrel. 

Brent’s prices in futures contracts are sinking back toward $50 later in the year, indicating investors’ uncertainty about oil’s outlook.

The oil industry has been weakened by an international divestment movement, demanding investment funds rid themselves of oil companies’ stocks; consumers’ ground shift to clean energy; and the growing popularity of electric vehicles, exemplified by GM’s and Volkswagen’s announcements that they will cease producing gas buggies in the next few years. 

TREND FORECAST: Political clout, or lack of it, is a function of financial might. As the oil industry’s economic power softens, it will exert less control over politicians. Watch for renewed and re-energized pushes in the U.S. to curtail or repeal the industry’s federally guaranteed depletion allowance and other tax breaks and financial privileges.

However, with the oil mafia, i.e. OPEC+ in charge and Brent Crude and West Texas Intermediate rising, so too will their profits.

3 Comments
  1. harlow53 2 months ago

    Hello Mr and Mrs America as Walter Winchell would say, have you noticed the increased price of gasoline at the local stations. Well, I talked to my son at Prudoe Bay and he said the Biden edicts to go GREEN and GO BIG in the new progressive, socialist, communist administration has crushed the state of Alaska and the native citizens of the state. It also has moved the price of a barrel of oil up to $60 and that is reflected at the pump, He also stated that thousands of oil and gas workers were shipped out and their jobs eliminated immediately when Biden and Kerry re-signed the Paris Climate Accord.

    There are some essential jobs in the oil fields that are functioning to keep the equipment from completely falling apart but that requires only a skeleton crew. As you know, there is a push to grow solar and wind jobs in Alaska in response to Kerry’s statement that American workers must retrain to work on solar panels and wind technologies. Hopefully the jobs will pay $15/hour while the oil industry was paying $25-$35/hour. The new administration is working hard to support American labor if you listen to their rhetoric. We are witnessing the destruction of generations of Americans and the total collapse of the casino on Wall Street and millions of businesses.

    As poverty overtakes American society, crime and general welfare of individuals will suffer and everyone has to be prepared to protect their being and assets immediately!!! I think we are in for a long siege of government surveillance and domestic purge if you are a patriot!!!

  2. David Stone 2 months ago

    It’s simple, the higher the cost of petroleum the more tax revenues for the politicians to steal. Follow the money.

  3. Vangel Vesovski 2 months ago

    Two things:

    If you ran an oil company and made all of those stupid investments in uneconomic shale would you not use this gift to write off those investments and set up your company for future gains?

    Given that production has exceeded reserve additions for years and that shale was never a true solution, how does the sector handle a post-peak environment?

    Both the risks and the opportunities are huge. We just have to take actions that reduce the former and take advantage of the latter.

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