Will the oil price outlook dip on US jobs data stoking demand fears?
The oil price forecast looks set to slide after US employment data fuels energy demand fears and investors grow increasingly concerned about the prospect of a slow economic recovery.
- Oil price forecast set to slide as US employment data fuels energy demand fears
- Brent crude and the US Western Texas Intermediate extend losses
- Oil price drops below key support
The oil price forecast slides after US jobs data fuels investors’ concerns that energy demand will weaken further and the wider economy will suffer a slow recovery.
The news will likely drive Big Oil stocks lower on Friday, with Exxon Mobil, Chevron and ConocoPhillips have all trended lower this week and all down more than 32% year-to-date.
Brent crude falls below key support
Josh Mahony, senior market analyst at IG, warned that a break below $44.04 for Brent crude could point toward further losses.
Brent crude is trading 22 cents lower (0.5%) at $43.85 at the time of publication, while the US West Texas Intermediate (WTI) is also down 22 cents (0.53%) to $41. 15 a barrel.
‘However, it makes sense to watch for whether we see any rebound from 61.8% or 76.4% Fibonacci support to indicate whether this is a reversal or retracement,’ he added.
Major investment firm dumps Big Oil stocks over climate policy
The Norwegian life insurance company Storebrand ASA has divested from US oil and gas majors Exxon Mobil and Chevron after upgrading its climate policy, with the financial services firm wishing to end its investment in coal and accelerate the transition to renewables.
Storebrand’s tightening of its climate policy will contribute to companies around the world contributing to reducing emissions and adapting operations to help the environment.
‘We aim to be a leading provider of sustainable investment solutions,’ Jan Erik Saugestad, executive vice president at Storebrand. ‘Climate risk is one of the biggest challenges facing the world and investors.’
‘Therefore, investors must move large amounts of capital to companies that deliver solutions to the climate crisis - and away from companies that do not take climate risk seriously,’ he added.
Exxon Mobil dramatically reduces capital expenditure amid Covid-19
The oil and gas major has significantly cut spending in 2020 by almost a third to around $23 billion, with the company doing all that it can to maintain its dividend after it reported losses for the first half of the year.
‘We have evaluations underway on a country-by-country basis to assess possible additional efficiencies to right-size our business and make it stronger for the future,’ Exxon Mobil spokesperson Casey Norton told Reuters.
As part of its cost-cutting programme, Exxon is looking to sell a 50% stake in its Bass Strait oil and gas venture based in south-eastern Australia, which is valued at approximately $3 billion.
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