September 4, 2020 Read More →

Energy trends turning industry into Small Oil

The Washington Post:

A dozen years ago, ExxonMobil was the bluest of blue-chip companies. Raking in record-breaking profit, it spent every quarter of 2008 as the world’s most valuable publicly traded company.

Not anymore. The oil giant’s market value today is about a third of what it was in 2008, when it approached $500 billion. That slide culminated last month with Exxon ending its 92-year run on the Dow Jones industrial average.

The removal of the longest-serving component of the U.S. stock indicator — Exxon joined in 1928, when it was known as Standard Oil of New Jersey — is just the latest sign of the decline of oil as major driver of the U.S. and global economies. 

The supermajors that were able to turn a profit were still off the mark from the previous year. Total and Royal Dutch Shell saw a second-quarter profit of $126 million and $638 million, respectively — a more than 80 percent decline from 2019 for each.

Big oil companies are borrowing money and selling assets to maintain dividends prized by investors, though those payouts create an untenable cash flow. According to the Institute for Energy Economics and Financial Analysis, those five oil majors spent $16.9 billion more on dividends and stock buybacks than they generated. 

[Dino Grandoni]

More: Big Oil just isn’t as big as it once was

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