OIL EDGES DOWN AS ENERGY SHARES CARRY STOCKS TO RECORDS
Oil prices edged lower Tuesday but remained at their highest levels in over two years.
At the same time shares of global energy companies continued to climb, helping send stocks in Europe and Asia to multiyear highs.
Brent, the global benchmark, was down 0.17% at $64.16 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.05% at $57.30 a barrel.
Oil prices, have climbed more than 30% from lows hit in June.
On Monday they jumped 3.5% to heights not seen since 2015 after Saudi Arabian Crown Prince Mohammed bin Salman had more than five dozen princes, ministers and prominent businessmen detained in an effort to tackle alleged corruption in the Kingdom.
Meanwhile, shares in Total SA and Tullow Oil were up 1.5% and 4.9%, helping send Europe’s oil and gas sector 1.3% higher.
Energy companies’ earnings in Europe have been revised higher following the recent rise in oil prices..
“I see rising oil prices as a short-term positive for equities,” said Chris Hiorns, fund manager at EdenTree Investment Management.
A SAUDI CRACKDOWN DOESN’T GUARANTEE AN ARAMCO IPO
The sweeping crackdown in Saudi Arabia may not guarantee that the kingdom moves forward with the initial public offering of its state-oil firm, writes Nathaniel Taplin for Heard on the Street.
Oil prices are now up 3% since Thursday.
Oil markets seem to be interpreting the Saudi arrests over the weekend as a sign of the crown prince’s strength, and that makes it more likely the initial public offering of Saudi Aramco — his pet policy—will go ahead.
“Still, Saudi elite politics are a black box. If this intrigue ushers in a significant period of instability at the top of Saudi government, pushing through a contentious $2 trillion IPO might prove tricky, to say nothing of enforcing painful oil-production cuts,” writes Mr. Taplin.
PEMEX CHIEF HOPES RECENT OIL FIND MAKES IT MORE ATTRACTIVE FOR JOINT VENTURE
Mexican state oil giant Petróleos Mexicanos hopes that a recent major oil discovery will make it a more attractive partner for foreign companies, writes Juan Montes.
Pemex, as the company is called, is planning on inking at least nine new joint ventures in the coming months, in addition to three existing deals with private firms said its Chief Executive Jose Antonio González Anaya Monday.
“Pemex said it had found its largest onshore oil deposit in the past 15 years, a reservoir the firm said could hold as much as 1.5 billion barrels of oil, much of it high-quality, light crude oil and natural gas. Production is expected to begin by early 2019,” reports the Journal.
The company has struggled in recent years amid the downturn in oil. Its output has declined by more than 40% to some 1.94 million barrels a day this year from a peak production of 3.4 million of barrels a day in 2004.