Taking stock of Big Oil's pandemic recovery
This week will show how some of the biggest oil-and-gas companies are recovering from the pandemic that's still weighing on demand for their products.
Driving the news: Companies including BP, Shell, Chevron and Exxon will report first-quarter earnings over the next four days.
Why it matters: The latest reports come after a year in which companies reported steep losses and huge write-downs on the value of their assets.
- Crude prices have significantly recovered, with the first three months being the strongest by far since the pandemic began.
- "[T]he industry has had a shot in the arm from the recovery in crude prices since late 2020, which will be evident in company results for the first time," HSBC analyst Gordon Gray tells The Guardian.
But, but, but: Bloomberg's detailed earnings preview notes that Big Oil's revived cash flow isn't expected to be a bonanza for investors.
- "For Exxon Mobil Corp. and Total SE, which bore the financial strain of maintaining shareholder payouts last year, any extra cash will go to easing debt," it reports.
- "Chevron Corp. and Royal Dutch Shell Plc have said they want to resume buybacks, but not yet."
Threat level: The path ahead for the sector remains fraught.
Prices have lost ground over the last month, with Brent crude currently around $65 compared to nearly $70 in mid-March.
That's partly due in part to a tragic surge in COVID-19 cases in India, a major oil consumer.