What’s happening: Brent oil futures, the global benchmark, have surpassed $ 60 a barrel, its highest level since January 2020.
“With Covid-19 cases now decreasing in certain regions, including the United States and the United Kingdom, there will be a glimmer of hope that the worst is behind us, especially with the increase in vaccination,” says Warren Patterson, strategist of commodities from ING and Wenyu Yao said in a recent note to customers.
There are also significant signs of recovery in demand in high-growth economies such as China, India and Brazil, said UBS oil analyst Giovanni Staunovo.
The demand path is definitely “pointing up,” he said.
Meanwhile, producers are working hard to keep supply under control, so that there can continue to be a significant drop in inventories, which have filled up last year.
Producers in the United States, for their part, will need more time to get back to work.
“Investment activity has been relatively quiet and it will take time to see a greater impact,” said Staunovo.
Together, this is good news for prices. The trend has supported the shares of oil companies like Exxon and Chevron since November.
That said: these stocks remain well below where they were before the pandemic, highlighting the long road ahead.
If investors are concerned that asset prices have gone up very, very fast, stock and oil prices could come under pressure. And the demand forecast remains unclear, especially as new variants of the coronavirus complicate schedules back to normal.
Remember: the International Energy Agency last month revised its forecast for global oil demand in 2021 downwards, citing “new blockages in several countries” that would weigh on fuel sales. Oil companies are also engaged in a serious debate over whether demand can fully recover. Looking at the next 12 months, the image looks brighter, but with many unknowns.
Hyundai and Kia: We are not talking to Apple about a car dealership
“We are not talking to Apple about the development of autonomous cars,” Hyundai said in a statement.
The statement added that Hyundai had received requests from “several companies” about the development of autonomous electric cars, but that “no decision has been made as we are in the early stages”. Apple declined to comment, reported my CNN business colleagues, Jill Disis and Gawon Bae.
The announcement shook investors who had been betting on some kind of tie between companies after news reports. Kia’s shares plunged nearly 15%, its worst day since at least 2001, according to data provider Refinitiv. The drop eliminated $ 5.4 billion from its market value.
Hyundai’s shares fell more than 6%, losing about $ 2.8 billion in market value.
Apple’s interest in South Korean automakers made sense. Analysts noted that Hyundai is open to joining forces with technology companies. It already has partnerships with the Chinese search giant Baidu and the American chip maker Nvidia on autonomous driving, for example.
The big question: if Apple moves on with its car, common sense is that it would choose to work with an experienced manufacturer. But who? Analysts also suggested Honda and Volkswagen as possible options, and attention may now shift in that direction.
Despite huge losses, US airlines are making money
The country’s four largest airlines – American, Delta, United and Southwest – closed last year with $ 31.5 billion in cash on their balance sheets. That was $ 13 billion a year earlier, before the pandemic hit.
What it gives: Although these airlines spent $ 115 million a day over the final nine months of 2020, the easy loan allowed them to sustain their finances.
Like a struggling family, inundated with credit card offers, airlines have many people on Wall Street eager to lend them money or help them raise funds from investors. Lower interest rates play a big role.
“Liquidity is at record levels,” said Philip Baggaley, chief credit analyst for aviation at Standard & Poor’s. “This is a good thing and it is one of the few strengths they have at the moment.”
In addition to selling bonds and borrowing, airlines have mortgaged their planes, frequent flyer programs and other assets, and even sold additional shares, an unusual move for an industry in crisis. In the meantime, they have made deep cost cuts.
“I think the general feeling is that they are injured, but they will survive,” said Baggaley.