Oil

Chevron agreed to pay $33 billion for Anadarko Petroleum on Friday, broadening its access to the largest oil region in the continental U.S. as President Trump pushes the country to produce enough fuel to meet its own energy needs.

The deal, which offers Anadarko investors $65 a share in cash and stock, expands Chevron’s oil production in the Permian Basin, the oil-rich swath of land in western Texas and southeastern New Mexico that’s 250 miles wide and about 300 miles long, as well as deepwater drilling in the Gulf of Mexico.

“We intend to accelerate activity in Anadarko’s Permian acreage,” Chevron CEO Michael Wirth, who hopes to complete the deal by the end of this year, told investors on Friday. “Getting more out of the Permian sooner is an important value driver.”

For the San Ramon, Calif.-based company, which already controlled 2.2 million acres in the region and is adding 589,000 with the transaction, the driver isn’t “getting bigger in the Permian, it’s about getting better,” Wirth said. That includes the the area’s Delaware Basin, where Anadarko has operations.

Late last year, the U.S. Geological Survey identified an estimated 46 billion barrels of oil in two formations in the Delaware Basin, a development that left then-Interior Secretary Ryan Zinke confident “that American energy dominance is within our grasp.”

The U.S. is the world’s largest oil producer, outpacing both Russia and Saudi Arabia, thanks largely to technological advances that let producers extract oil from shale formations.

Achieving energy independence was one of Trump’s signature campaign promises in 2016, a commitment based on concern that U.S. reliance on oil imports left the country more vulnerable and cost American jobs.

“We’re ending the theft of American prosperity and rebuilding our beloved country,” Trump said when he signed an executive order prompting energy independence just two months after taking office. “We will unlock job-producing natural gas, oil and shale energy.”

Anadarko climbed 33 percent to $62.20 after the sale was announced Friday. Chevron, which has a market value of $232.9 billion, has climbed 10 percent this year to $119.76.

FILE PHOTO: Pedestrians are reflected on an electronic board showing stock prices outside a brokerage in Tokyo
FILE PHOTO: Pedestrians are reflected on an electronic board showing stock prices outside a brokerage in Tokyo, Japan December 27, 2018. REUTERS/Kim Kyung-Hoon

April 12, 2019

By Herbert Lash

NEW YORK (Reuters) – Global stock markets rose on Friday after JP Morgan’s results kicked off the U.S. corporate earnings season in style, while signs of stabilization in China’s economy also helped riskier assets on views the growth outlook worldwide is better than thought.

Chinese data showed exports rebounded last month, driving U.S. and euro zone bond yields to three-week highs and helping offset weaker imports and reports of another cut in German growth forecasts.

Investors are looking for signs of a Chinese economic recovery to temper global growth worries, especially after the International Monetary Fund this week downgraded its 2019 world economic outlook for the third time.

China’s trade results, as well as credit data, have helped boost risk appetite and reinforce the stabilization thesis, which should have spill-over effects for the global economy, said Candice Bangsund, a portfolio manager with the global asset allocation team at Fiera Capital in Montreal.

“The whole China situation really appears to be gaining some ground,” Bangsund said. “We saw a very impressive rebound in exports, this of course is helping alleviate fears of a hard landing.”

MSCI’s gauge of equity market performance in 47 countries gained 0.37%, while the EURO STOXX 50 index rose 0.31%.

On Wall Street, the Dow Jones Industrial Average rose 186.88 points, or 0.71%, to 26,329.93. The S&P 500 gained 12.47 points, or 0.43%, to 2,900.79 and the Nasdaq Composite added 19.07 points, or 0.24%, to 7,966.43

The euro gained despite the German growth concerns. Dealers were gearing up for demand from Japan as Mitsubishi UFJ Financial closed in on its multi-billion-euro acquisition of DZ Bank’s aviation-finance business.

The dollar index fell 0.37%, with the euro up 0.56% to $1.1313. The Japanese yen weakened 0.28% versus the greenback at 111.99 per dollar.7

Euro zone and U.S. government debt yields rose after the rebound in Chinese exports.

Yields on Germany’s 10-year government bond crossed into positive territory, to 0.054%.

Benchmark 10-year U.S. Treasury notes fell 13/32 in price to push up their yield to 2.5507%.

CRUDE OIL’S BIG 2019 START

Oil provided the big milestones. Brent was at $71.4 a barrel, having broken back through the $70 threshold this week, and U.S. WTI was heading for a sixth straight week of gains for the first time since early 2016.

Involuntary supply cuts in Venezuela, Libya and Iran have supported perceptions of a tightening market, already constrained by production cuts from OPEC and its allies.

Brent crude oil futures rose 64 cents to $71.47 a barrel while West Texas Intermediate crude futures, the U.S. benchmark, added 64 to $64.22.

Commodities have had the best first-quarter start ever, Bank of America Merrill Lynch analysts said, calling the annualized returns they are tracking the strongest in the past 100 years.

Taking advantage of strong prices and subdued valuations for oil producers, Chevron said it will buy Anadarko Petroleum Corp for $33 billion in cash and stock.

Gold steadied en route to its first weekly gain in three weeks as the dollar weakened, although the metal’s advances were capped by stronger equities.

Gold crept higher after falling more than 1 percent on Thursday to break below $1,300 following solid U.S. data. Spot gold traded at $1,292.41 per ounce.

For a graphic on Falling volatility, see – https://tmsnrt.rs/2X40O8U

(Reporting by Herbert Lash; Editing by Dan Grebler)

Source: OANN

The Trump administration is making a push to combat shareholder climate change advocacy as part of an effort to break barriers to fossil fuel use and development.

President Trump issued an executive order Wednesday primarily designed to curb states’ power to block pipelines and other energy infrastructure projects.

But it also contained a short provision requiring the Labor Department to study pension funds’ energy sector investments and to investigate whether the growing and successful shareholder campaign for pension managers to consider companies’ exposure to climate change risks is harming the economic performance of the funds.

Trump also wants the Labor Department to explore whether activist investors’ so-called “environmental, social and governance efforts” emphasizing climate change risks is discouraging financing of energy projects in capital markets.

“The ‘keep it in the ground’ movement has two tools,” said Kevin Book, a managing director of the ClearView energy research group who studies oil and gas. “It’s not just cutting off pipelines. The second part is cutting off capital, either making it so capital is more expensive or discouraging capital market investments in energy producing companies. Trump’s executive order pushes back on both things.”

Trump critics say his administration’s targeting of shareholder climate change advocacy is irresponsible.

“The Trump administration’s attempt to intimidate pension funds that have decided not to invest their members’ savings in the very companies whose activities put the global economy at risk is a new low,” Sen. Sheldon Whitehouse, D-R.I., told the Washington Examiner.

Trump’s order focuses specifically on employer-sponsored retirement funds, such as 401(k) accounts and pensions, which the Labor Department is empowered to regulate under the Employee Retirement Income Security Act.

In recent years, activist shareholders have pushed for resolutions calling on major oil and companies to disclose the risk posed to their business by climate change. These shareholders argue the stocks of fossil fuel-dependent energy companies are overvalued because of climate change risk, and fossil fuel debt is risky considering the future effects of global warming and the potential of government regulation over carbon emissions.

The pressure has resulted in many companies publishing, or committing to release, reports on climate risk, and promising actions to reduce that risk.

For example, Shell recently announced it is leaving a major industry lobbying group, American Fuel & Petrochemical Manufacturers, because of the trade association’s inaction on climate policy.

Shell acted after it reached an agreement last year with activist shareholder groups to set short-term carbon emissions reduction targets.

“There is a growing number of shareholder groups asking for proxy votes where shareholders require oil-producing or coal-producing hydrocarbon-intensive companies to make decisions constraining their activities, lowering their carbon footprint, or disclosing what their climate risks are,” Book said.

Book said Trump wants the Labor Department to investigate the financial effects of pension managers, driven by shareholder pressure, prioritizing climate change concerns over profitability in making investments.

Supporters of Trump’s effort say the push to prioritize climate risk efforts runs counter to pension managers’ fiduciary obligations to employees.

“What they are doing is responding to what they and others on the center-right believe is a corporate governance shareholder process that has been hijacked to push a social and political agenda that wasn’t able to get through the halls of Congress and now is not able to come through the administrative state with Trump in charge,” said Tim Doyle, vice president of policy and general counsel at the American Council for Capital Formation. “They are putting people on notice.”

The shareholder climate disclosure effort recently suffered a setback when the Securities and Exchange Commission granted ExxonMobil’s request to dismiss an investor resolution that would have pushed the company to disclose greenhouse gas emission reduction targets aligned with the goals of the Paris climate change agreement.

The SEC agreed with Exxon’s position that the resolution would unfairly “micromanage” the oil and gas company’s affairs.

Book said that SEC decision, and Trump’s move to review shareholder climate change advocacy, could slow such efforts but “may not put the genie back in the bottle now that large energy producers have started to report climate risk.”


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