Rough earnings reports loom for Big Oil companies
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This week brings the heart of Big Oil's earnings season and it's not going to be a pretty picture for the industry.
Why it matters: The second-quarter results will bear the heavy imprint of the collapse in demand and prices in recent months — and could reveal more about steps that companies are taking in response.
What's next: European giants Shell and Total report Thursday, while U.S.-based majors ExxonMobil and Chevron report Friday.
What they're saying: "Our team has [forecast] earnings for 72 quarters and 2Q20 seems the most difficult of them," Jefferies analyst Jason Gammel said in a recent note, per S&P Global Platts.
The big picture: "The problem is that there is almost nowhere to hide," Nick Cunningham writes at Oilprice.com.
- Typically low crude prices are offset by majors' refining assets aided by cheaper inputs and heavier demand when fuel costs are low, he points out.
- But lockdowns crushed demand, and "as a result, refining margins collapsed," Cunningham writes. Petrochemical and gas markets were battered too.
Catch up fast: Results from big oilfield services companies last week already show the pandemic's toll.
- On Friday Schlumberger posted a $3.4 billion loss and said it's cutting 21,000 jobs. The Houston Chronicle has more.
