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#MoneyBeat Mining Firms Suffer From Rising Oil Prices—Energy Journal

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A daily digest of The Wall Street Journal’s coverage of energy companies, commodity markets and the forces that shape them.

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ENERGY PRICES DIG INTO MINERS’ PROFITS

Mining companies are grappling with how to keep rising energy costs from eating into their profits, writes the Wall Street Journal’s Rhiannon Hoyle.

Companies including BHP Billiton Ltd., Rio Tinto Ltd. and Glencore PLC have all introduced cost-cutting measures such as driverless trucks and job cuts to keep overhead down during a previous commodities bust.

Now that the firms are finally making money, climbing costs for fuel, wages and chemicals are weighing on the sector.

Energy bills are rising after an oil rally of more than 20% this past year.

A depreciating U.S. dollar versus the currencies of top mining countries is also putting pressure on margins, as commodities are mostly sold using the U.S. currency.

“Clearly, inflation’s becoming a bigger issue,” said Anglo American PLC Chief Executive Mark Cutifani.
Meanwhile, oil prices edged down Tuesday morning, as fresh signs of rising U.S. shale production appeared to put a cap on prices.

Brent crude, the global benchmark, was down 0.25% at $64.81 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.08% at $61.32 a barrel.

EXXON REVIEWING PLAN TO DOUBLE GULF COAST REFINING FOOTPRINT

Exxon Mobil Corp. is considering a plan to double its refining capacity in the U.S. Gulf Coast, an executive for the firm said.

MEXICO’S TOP PRESIDENTIAL CANDIDATE PLOTS BIG SHAKE UP FOR MEXICO’S OIL INDUSTRY

The leading candidate for Mexico’s  presidential elections signaled a desire to halt the country’s exports of crude oil. According to sources, Andres Manuel López Obrador, a leftist nationalist with a comfortable lead in the polls, views Mexico as having become too dependent on the U.S. for refined gasoline.

RUSSIA AIMS TO INCREASE FUEL EXPORTS TO EUROPE

Russia aims to fight for its share of the European energy market by ramping up its fuel exports, Reuters reports.

GE’S TOP EXECUTIVES MISS OUT ON CASH BONUSES FOR THE FIRST TIME

General Electric Co executives got zero in bonuses  last year for the first time in the firm’s 125-year history, write Thomas Gryta and Theo Francis.

The Boston-based company said in a regulatory filing Monday that its board withheld the 2017 bonuses and canceled some 2015 equity awards that executives would have partly received.

It cited the conglomerate’s struggles last year, which forced GE to slash its dividend, cut thousands of jobs and overhaul its leadership.

GE said it was changing its executive compensation program for 2018. The company is tying equity awards to total shareholder return.

Bonuses for employees of each operating business will be funded based on segment performance, rather than overall company performance.

FUTURECURVE

Today: API issues forecasts on the U.S. crude inventory.

Wednesday: OPEC will release its monthly oil market report. Also the U.S. Energy Information Administration releases production figures.

Thursday: The International Energy Agency issues an oil market report

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