Aug 2, 2019

Big Oil faces a slowing economy and renewed trade war

Illustration: Sarah Grillo/Axios

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 yesterday, 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." On this side of the Atlantic, ExxonMobil faced a 21% drop in quarterly profit while Chevron saw a 26.3% rise in its quarterly profits, per Reuters.

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.

"For companies, this means a long global oil market is weighing on crude prices at the same time that U.S. infrastructure shortfalls are weighing on gas prices."
— Kevin Book, managing director, ClearView Energy Partners

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.

Go deeper: The forever trade war

Go deeper

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 5,410,228 — Total deaths: 345,105 — Total recoveries — 2,169,005Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 1,643,499 — Total deaths: 97,722 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. World: White House announces travel restrictions on Brazil, coronavirus hotspot in Southern Hemisphere Over 100 coronavirus cases in Germany tied to single day of church services — Boris Johnson backs top aide amid reports that he broke U.K. lockdown while exhibiting symptoms.
  4. Public health: Officials are urging Americans to wear masks headed into Memorial Day weekend Report finds "little evidence" coronavirus under control in most statesHurricanes, wildfires, the flu could strain COVID-19 response
  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Public employees brace for layoffs.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 53 mins ago - Politics & Policy

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

The CDC is warning of potentially "aggressive rodent behavior" amid a rise in reports of rat activity in several areas, as the animals search further for food while Americans stay home more during the coronavirus pandemic.

By the numbers: More than 97,700 people have died from COVID-19 and over 1.6 million have tested positive in the U.S. Over 366,700 Americans have recovered and more than 14.1 million tests have been conducted.

World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

Japan's economy minister outlined plans on Monday to end the nationwide state of emergency as the number of new novel coronavirus cases continues to decline to fewer than 50 a day, per Bloomberg. Japan has reported 16,550 cases and 820 deaths.

By the numbers: Over 5.4 million people have tested positive for the virus as of Monday, and more than 2.1 million have recovered. The U.S. has reported the most cases in the world (over 1.6 million from 13.7 million tests). The U.K. is reporting over 36,800 deaths from the coronavirus — the most fatalities outside the U.S.