What’s Happening: Brent crude oil futures, the global benchmark, have surpassed $ 60 a barrel, the highest level since January 2020.
“With Covid-19 cases declining in certain regions, including the US and UK, there will be a ray of hope that the worst is now over, especially as the introduction of vaccinations increases,” said Warren Patterson, commodities strategists at ING. and Wenyu Yao said in a recent note to customers.
There are also significant signs of demand recovery in high-growth economies such as China, India and Brazil, UBS oil analyst Giovanni Staunovo told me.
The demand path “certainly points upwards,” he said.
In the meantime, producers are working hard to keep supply under control so that stocks, which fill up last year, can be significantly reduced.
Producers in the United States are expected to need more time to get back on track.
“Investment activity has been relatively subdued and it will be some time before the impact intensifies,” said Staunovo.
All things considered, this is good news for prices. The trend has supported the stocks of oil companies such as Exxon and Chevron since November.
That said, such stocks remain well below pre-pandemic levels, underscoring the long way ahead.
If investors are concerned that asset prices have risen too high and too fast, both stock and oil prices could come under pressure. And the demand prediction remains unclear, especially as new coronavirus variants complicate it back to normal timelines.
Remember, the International Energy Agency last month revised its forecast for lower global oil demand in 2021, citing “renewed lockdowns in a number of countries” that would weigh on fuel sales. Oil companies are also engaged in a serious debate about whether the demand can ever fully recover. Looking forward to the next 12 months, the picture looks brighter, but with many unknowns.
Hyundai and Kia: We are not talking to Apple about a car deal
“We are not in talks with Apple about developing self-driving cars,” Hyundai said in a statement.
The statement added that Hyundai has received requests from “numerous companies” to develop self-driving electric cars, but that “no decision has been made yet as we are in the early stages.” Apple declined to comment, my CNN Business colleagues Jill Disis and Gawon Bae report.
The announcement shocked investors who had bet on some sort of bond between the companies following news reports. Kia’s stock plummeted nearly 15%, its worst day since at least 2001, according to data provider Refinitiv. The fall wiped $ 5.4 billion from its market value.
Hyundai’s stock fell more than 6% and lost about $ 2.8 billion in market value.
Apple’s interest in auto makers in South Korea made sense. Analysts have pointed out that Hyundai was open to joining forces with technology companies. It already has partnerships with, for example, the Chinese search giant Baidu and the American chipmaker Nvidia in the field of autonomous driving.
The big question: If Apple moves forward with its car, the prevailing wisdom is that it would choose to work with an experienced manufacturer. But who? Analysts have also cited Honda and Volkswagen as possible options, and attention can now move in that direction.
Despite huge losses, American airlines are rolling in cash
The country’s four largest airlines – American, Delta, United and Southwest – closed last year with a combined $ 31.5 billion in cash on their balance sheets. That’s more than $ 13 billion a year earlier, before the pandemic hit.
Grateful: Although these airlines spent $ 115 million a day over the last nine months of 2020, easy borrowing allowed them to keep their finances up.
Like a struggling family inundated with credit card offers, airlines have plenty of people on Wall Street eager to lend them money or help them raise money from investors. The lowest interest rates play a big role.
“Liquidity is at record levels,” said Philip Baggaley, chief credit analyst for the aviation sector at Standard & Poor’s. “That’s good, and it’s one of the few strengths they have at the moment.”
In addition to selling bonds and taking out loans, airlines have sold mortgages on their planes, frequent flyer programs and other assets, and even additional stock, an unusual move for an industry in crisis. In the meantime they have implemented significant cost savings.
“I think the general feeling is that they are hurt, but they will make it,” said Baggaley.