Big Oil Stocks Boosted by Signs of U.S. Intervention
April 02 2020 - 9:14AM
Dow Jones News
By Anna Isaac
Shares in big oil companies climbed Thursday as President Trump
said the Russia-Saudi price dispute could soon be resolved, and was
set to meet with industry leaders.
Mr. Trump is expected to meet with top executives from some of
the U.S.'s largest oil companies Friday, including Exxon Mobil
Corp. Chief Executive Darren Woods, Chevron Corp. CEO Mike Wirth
and Harold Hamm, executive chairman of Continental Resources
Inc.
Exxon's shares rose 7.3% in premarket trading and Chevron's
climbed 6.5%. Royal Dutch Shell PLC rose 9.5%, making the
London-listed stock one of the biggest gainers in Europe
Thursday.
Brent crude and West Texas Intermediate crude futures both leapt
more than 10% to $27.46 and $22.36 a barrel respectively.
Mr. Trump said Wednesday he was confident Russia and Saudi
Arabia would be able to work out a resolution to their differences
over the oil market.
The pressure from Mr. Trump on Saudi Arabia and Russia to find
common ground to support crude markets has lifted oil stocks, said
Colin Smith, director of oil-and-gas research at merchant bank
Panmure Gordon.
Analysts were wary of how meaningful an intervention by the U.S.
might be in the spat between two of the world's most important oil
producers -- or that the bounce in big oil stocks would be
sustained.
Goldman Sachs analysts said the nearly 40% bounce in oil
companies' shares since their March 18 trough would only last if
crude prices recover -- something they "do not see on the immediate
horizon."
The expectation of an extended crude rout was one reason oil
companies had cut back on investment and halted share buybacks to
shore-up their finances, Panmure Gordon's Mr. Smith said. "The
industry is trying to give itself as much space as possible to work
out how bad things are before it may have to cut dividends."
Write to Anna Isaac at anna.isaac@wsj.com
(END) Dow Jones Newswires
April 02, 2020 08:59 ET (12:59 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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