The oil companies are making a big comeback even as oil prices see a correction, after one of the best January’s 5 years in oil. Petro China profits may have tripled and Exxon Mobil is investing big in America again. The doom and gloom in Big and Little oil is going away as a market led by capitalistic optimism is making oil great again. Even as oil is weak today, because of a small correction in the stock market and worries about President Trump’s speech and what the Fed might do as well as expectations of the first crude supply build this year, the optimism in the economy is building. In the big picture, the outlook for crude prices are stellar as more oil bears are throwing in the towel and banks are raising their oil price forecasts. Welcome to the bull side of oil, we are happy to have you join us.
Bloomberg News reports that PetroChina Co. revenues may have tripled amid cost-cutting and higher energy prices. Income for 2017 may have jumped by as much as 16 billion yuan ($2.5 billion), the state-run oil giant said in a filing to the Hong Kong stock exchange, citing Chinese accounting standards. That implies net income of as much as 23.9 billion yuan. Profit at the Beijing-based company will snap three years of declines after posting its worst-ever profit in 2016 as falling crude prices crushed profitability.
The Wall Street Journal reported Monday that Exxon Mobil Corp. plans to spend $50 billion to expand its business in the U.S. in the next five years, investments that were “enhanced” by the American tax overhaul. The Texas-based energy giant didn’t specify whether the investment plan represented an increase in spending as a result of the tax rewrite passed by Congress and signed into law by President Donald Trump late last year, or how much of the $50 billion was tied to prospects Exxon was considering before the tax changes. Exxon Chief Executive Darren Woods made the announcement in a blog post, adding that the company was still studying whether the tax overhaul made additional investment more economically viable. “We’re actively evaluating the impact of the lower tax rate on the economics of several other projects currently in the planning stages to further expand our facilities along the Gulf Coast,” Mr. Woods said in the post. He singled out drilling operations in West Texas and New Mexico as areas where Exxon will be investing billions to boost production. The company has been planning to step up its spending levels in that region for years.
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