What to Watch

The Miners Are Back

 The world’s biggest mining companies are cash machines again, writes The Wall Street Journal’s Michael Amon.

Anglo American PLC, the British mining giant, on Thursday was the latest big producer of coal, iron ore and other commodities to report a return to major profits.

Anglo said its profits had nearly doubled to over $3 billion, its net debt had fallen nearly in half, and the company hiked its dividend payout.

Anglo’s financial results followed a string of strong reports from Glencore PLC, BHP Billiton Ltd. and Rio Tinto  .

They all rewarded investors with cash, either through increased dividends, share buyback programs or both.

Just two years ago, some of these miners were on the brink. Glencore had just survived a scary plunge in its share price.

Anglo was contemplating slashing its workforce by as many as 85,000 employees and was at risk of a takeover.

The companies’ fortunes have turned around on the back of rising commodity prices, including coal, which has risen about 12% in the past year.

They all still have problems. BHP is facing demands from activist investor Elliott Management to sell its shale-oil assets in the U.S. and collapse its dual U.K.-Australian corporatestructure.

Glencore is having problems in the Democratic Republic of Congo, where the state mining company is pushing to nationalize the industry and a former partner has been sanctioned by the U.S. government. 

 But, as the Journal’s Nathaniel Taplin wrote this week, the mining industryhas rewarded investors who were willing to wait out the bad times.

Meanwhile, oil prices fell on Thursday  as investors anticipate weekly U.S. stocks data.

Brent crude, the global oil benchmark, fell 0.4% to $65.12 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.7% at $61.27 a barrel.

Energy News

GE Won’t Sell Baker Hughes Stake Yet, Lowers 2018 Profit View

General Electric Co. lowered its 2018 profit outlook Wednesday and dashed expectations that it will sell its majority stake in oil services firm Baker Hughes before 2019.

Mandates, Not Market Prices, Likely to Keep U.S. Solar Growing

U.S. local and state policies will continue to bolster the growth of solar power, despite the Trump administrations recent move to slap tariffs on imported solar panels, writes Erin Ailworth.

“We are still bullish that solar prices will continue to come down—maybe not at the pace they’ve been coming down”

– Robert Caldwell, President of Duke Energy Corp.

Surging Demand for Car Batteries is Fueling Child Labor in Mines

A booming market for cobalt, a vital mineral in batteries used in electric vehicles and mobile phones, is fueling a surge in small scale mining in the Democratic Republic of Congo, where some mines use child labor, Bloomberg reports.

WSJ Energy In-Depth

America’s Emerging Petro Economy Flips the Impact of Oil

 High oil prices used to be bad for the U.S. economy and consumers but America’s ascendency as a leading fossil fuel producer has led to economic growth even as crude prices rise, writes The Wall Street Journal’s Grep Ip.

More expensive oil is still a tax on consumers. But that tax is increasingly offset by the boost to energy investment, production and jobs.

The U.S. business cycle is now tied in complex and surprising ways to the global oil market.

This is a sharp contrast to historic patterns. When oil prices plunged in 1998 because of the Asian financial crisis, U.S. growth got a boost. When they skyrocketed in 2008, it pummeled an economy already wilting from the mortgage crisis.

BP PLC’s latest world energy outlook  predicts the U.S. will account for 18% of world oil and related liquids output in a little over two decades, well ahead of second-place Saudi Arabia at 13%.

Big Number

$4.69 billion

Spain’s Repsol, Europe’s fifth-largest refiner by market value, is set to sell its 20% share of Gas Natural to CVC Capital Partners for $4.69 billion, Reuters reports.

FutureCurve

Today: The Energy Institute hosts the last day of the International Petroleum Week conference in London. Speakers include BP Chief Executive Bob Dudley and Dr. Faith Birol, executive director of the International Energy Agency.

Also, the U.S. Energy Information Administration will release its weekly petroleum status report.

March 5-9: Cambridge Energy Research Associates hosts the CERAWeek energy conference in Houston. The speakers include IHS Markit Vice Chairman Dr. Daniel Yergin and Amin Nasser, president and CEO of Saudi Arabia Oil Co., or Saudi Aramco.

June 5-6: The London Crude Oil Summit. The speakers include Shell Vice President of Crude Trading Mike Muller and Franco Magnani CEO, of Eni Trading and Shipping.

Reporter’s Notebook

The WSJ’s reporter Benoit Faucon on peak demand. The International Energy Agency does not see global demand for oil peaking before 2040, its executive director said Wednesday. The remarks come after British oil giant BP PLC predicted Tuesday that demand for crude oil could peak in the next two decades, as renewables like solar power surge faster than expected to meet a greater share of the world’s energy mix. But speaking at the IP Week conference in London, Fatih Birol, head of the IEA, which monitors energy trends for big consumers, said “we don’t see a peak in oil demand unlike what some companies say.” While the use of electric cars will increase by 2040, it will remain a minority and “demand will grow because of trucks, jets and petrochemical,” he said.

The WSJ’s correspondent Sarah McFarlane on China’s gas consumption. China plans to commission 5 new liquefied natural gas receiving terminals this year, says Shengxiang Su, senior natural gas analyst at JLC Network Technology. Speaking at IP Week in London, Ms. Su said China’s continued switch away from coal to gas will drive its LNG demand in 2018. In 2017 Chinese LNG imports rose by around 50% as the country sought to improve air quality by burning gas instead of coal for heat and electricity.

The WSJ’s Christopher Alessi on Germany’s relationship with coal. Germany has been slow to phase out coal, but “there is a growing realization” that to meet their 2030 climate targets “they need to do something else,” said Tor Martin Anfinnsen, senior vice president at Statoil ASA. “The easy option is to substitute more coal for gas,” Mr. Anfinnsen said during the annual International Petroleum Week conference in London on Wednesday. He argued that in Germany the “reality will catch up” with the political considerations that have held back a transition away from coal.