Whatâs Going On Here?Oil giant Chevron reported some lackluster quarterly results on Friday. What Does This Mean?For an energy source thatâs apparently past its best, there sure is a lot of money left in fossil fuels, especially since the war in Europe drove prices near all-time highs last year. And that climateâs got analysts all excited: theyâve been betting that Western oil giants â including ExxonMobil, Shell, and BP â will report a record-breaking combined profit of around $200 billion for 2022. Chevron was first up, announcing a nearly $37 billion annual profit â double 2021âs figure and a stone-cold $10 billion higher than its previous record. But that didnât wow hard-hearted investors, who were more interested in last quarterâs slowdown: after all, Chevron made a paltry $6.4 billion profit, a far cry from the $8.2 billion that wide-eyed analysts had dreamed of. Why Should I Care?Zooming in: Making it pour.
Chevronâs shareholders shouldnât get too stroppy: late last week the firm announced its biggest ever share buyback scheme, to the tune of $75 billion â enough money for Chevron to buy almost any of its US-based competitors (tweet this). But while flexing that hard is cool and all, there was one person who wasnât impressed: Uncle Sam. See, the US government thinks Chevronâs cash would be better spent topping up oil supplies to bring prices down for consumers. And although Chevron said it can do that and reward shareholders, itâs barely expecting to up production this year â so, not entirely convincingâŠ
The bigger picture: Counting on China.
The price of Brent crude â a key oil benchmark â has fallen about a third since June, as folk fret that the global slowdownâs poised to hit demand. But Chevronâs betting that the reopening of China, the worldâs biggest oil importer, will ramp up demand while supply remains tight. Some analysts agree, predicting that prices could surge past $100 a barrel again this year. | 