In what is turning out to be a very impressive earnings season, nearly all the oil majors are beating expectations and rewarding shareholders with higher dividends and share buybacks, much to the chagrin of the White House. Euphoria for oil companies as earnings exceed expectations. Meanwhile, a major geopolitical risk is rising in the Middle East, OilPrice said.
Strong corporate earnings have breathed new life into the oil markets, with most oil majors sticking to their set policy of increasing dividends and ramping up share buybacks. This might not sit well with the White House ahead of the midterm elections as the flurry of optimism has supported oil prices well, with ICE Brent within touching distance of the $100 per barrel psychological barrier. The difficulties that sprang up earlier this week – widespread dumping of Chinese assets amidst Xi Jinping’s re-election, the ECB’s sullen interest rate increase, and many others – appear to have been forgotten, for now.
World Bank projects energy price decline.The World Bank announced it expects global energy prices to drop 11% in 2023 after a massive surge this year, putting Brent prices at $92 per barrel and expecting decreases in both natural gas and coal prices next year amidst weaker growth. US diesel tops the shortage agenda. With US distillate inventories at the lowest level for this time of the year since the EIA started collecting weekly data in 1982, at 106 million barrels, diesel prices will have a massive upside in the winter months unless rates of diesel consumption decline. IEA casts a long shadow on fossil fuels.In its 2022 edition of the World Energy Outlook, the International Energy Agency indicated that global demand for every fossil fuel will peak around 2030, which is especially surprising for natural gas, previously seen as the bridge fuel towards a greener future.