Inventories of oil producers and US crude oil futures jumped on Tuesday after President Joe Biden on Monday called on oil companies to pay higher taxes to lower fuel costs for consumers. ExxonMobil (XOM) stock and chevron (CVX) Shares rose in trading on Tuesday.
Biden has repeatedly targeted oil majors in recent months, accusing them of enjoying record profits by restricting production, stopping oil supplies and driving up prices. In an effort to combat rising prices as the midterm elections approach, the president released oil from the US Strategic Petroleum Reserve.
Meanwhile, US crude oil prices rose 2% on Tuesday to $88.37 a barrel – still well below their early October high above $93. Oil futures traded 0.2% lower early Wednesday, and settled above $88.
Prices rose nearly 9% in October, the first monthly rise since May. On Tuesday, dollar weakness outweighed concerns about possible new Covid-19 restrictions in China, sending oil prices higher. entry november, 2 million barrels per day cut production From the Organization of the Petroleum Exporting Countries (OPEC) and its major allies including Russia, known as OPEC+, is officially in effect.
Tougher European Union sanctions against Russia are also scheduled for December, resulting in new restrictions on Russian oil.
Against this backdrop, Biden called on Congress on Monday to tax energy companies if booming profits are not used to lower energy costs for consumers. The Wall Street Journal reported Monday that Biden has been considering agreeing to a tax on oil companies for several months.
“Their profits are windfall gains from the war,” Biden said during his speech at the White House. “In a time of war, any company that receives such sudden historical profits has a responsibility to act beyond the narrow self-interest of its executives and shareholders.”
Oil Producers’ Stocks: Taxing Exorbitant Profits
Biden’s comments follow shares of oil producers ExxonMobil and Chevron reported consolidated net income More than $30 billion in the third quarter. ExxonMobil in Irving, Texas, reported the strongest quarterly profit in its 152-year history. This was Chevron’s second-best financial result, trailing its performance in the second quarter only.
“There have been discussions in the United States about our industry returning some of our profits directly to the American people,” Exxon CEO Darren Woods said last week in prepared remarks ahead of the earnings call.
“That’s exactly what we’re doing in the form of our quarterly earnings,” Woods said.
Mike Wirth, Chevron’s CEO, also noted last week that if energy companies were taxed, they could produce less oil.
“Usually, if you want a little bit of something, you tax it,” Wirth told Bloomberg TV last week. “If you want more of something, you tend not to tax it.”
Exxon Mobil stock jumped 1% to 111.91 on Tuesday During market trading. Chevron shares rose 0.7%. Since hitting a recent low of 140.46 on Sept. 27, Chevron shares are up 30%. Chevron is in buy zone above 182.50 entry point in 20 week consolidation. Exxon was extended after the hack in October.
Powered by Warren Buffett Occidental Petroleum (OXY) added 1.7%. Occidental is in a buying range after clearing the buy handle at 72.14.
oil producer stocks coincidence (shill), based in the Netherlands, with 0.4% while London-based BP (BP) rose 0.4% before closing 0.2% lower. On Monday, BP reported its second-highest quarterly profit. Profits boosted $3 billion in gas trading over the quarter. BP also announced additional share buybacks worth $2.5 billion.
On Tuesday, Saudi Aramco, the Saudi national oil company, reported a 39% jump in its quarterly profit.
OPEC raises oil demand forecast
On Monday, OPEC raised its forecast for global oil demand. The oil cartel’s 2022 World Oil Prospects report says demand will continue to grow in the medium and long term, up 23% by 2045.
OPEC projects globally There should be an average annual increase of 2.7 million barrels of oil equivalent per day until 2045. Total investments in the oil sector are $12.1 trillion through 2045, according to the report.
“The chronic underinvestment in the global oil industry in recent years, due to the industrial downturn, the COVID-19 pandemic, as well as policies focused on ending financing in fossil fuel projects, is a major cause for concern,” the report says.
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