What’s up: Brent crude futures, the world’s benchmark, have topped $ 60 a barrel, the highest level since January 2020.
“With Covid-19 cases now declining in certain regions, including the United States and the United Kingdom, there will be some hope that the worst is now behind us, especially as vaccine deployments are achieved. ING commodity strategists Warren Patterson and Wenyu Yao said in a recent note to customers.
There are also significant signs of a recovery in demand in high-growth economies such as China, India and Brazil, UBS oil analyst Giovanni Staunovo told me.
The trajectory of demand is definitely “pointing up,” he said.
Meanwhile, producers are working hard to keep supply under control, so that a significant reduction in inventories, which were filled last year, can continue to occur.
For its part, U.S. producers are expected to need more time to get back to speed.
“Investment activity has been relatively silenced and it will still take time to see a bigger impact,” Staunovo said.
All in all, this is good news about pricing. The trend has supported the shares of oil companies such as Exxon and Chevron since November.
That said, these stocks remain well below where they were before the pandemic arrived, underscoring the long road ahead.
If investors worry that asset prices have moved too, too fast, both stocks and oil prices could be pressured. And demand forecasting remains murky, mostly because new coronavirus variants complicate normal deadlines.
Recall: The International Energy Agency last month revised its 2021 forecast for global oil demand, citing “renewed blockades in several countries” that would affect fuel sales. Oil companies are also locked in a serious debate over whether demand can fully return. Looking ahead to the next twelve 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 holding talks with Apple on autonomous car development,” Hyundai said in a statement.
The statement added that Hyundai has received requests from “numerous companies” on the development of electric cars with automatic driving, but that “no decision has been made as we are in the initial phase.” Apple declined to comment, as reported by my CNN Business colleagues Jill Disis and Gawon Bae.
The announcement shook investors who had opted for some sort of bond between companies after news. Shares of Kia fell nearly 15%, the worst day since 2001 at least, according to data provider Refinitiv. The fall removed the market value of $ 5.4 billion.
Hyundai shares fell more than 6%, losing about $ 2.8 billion in market value.
Apple’s interest in South Korean carmakers made sense. Analysts have noted that Hyundai has been open to joining forces with technology companies. It already has collaborations with Chinese search giant Baidu and US chip maker Nvidia on autonomous driving, for example.
The big question: if Apple is moving forward with its car, the predominant wisdom is that it would choose to work with an experienced manufacturer. But who? Analysts have also floated Honda and Volkswagen as possible options, and attention can now turn in that direction.
Despite the huge losses, American airlines are circulating cash
The country’s four largest airlines – American, Delta, United and Southwest – closed last year with $ 31.5 billion in collective cash on their balance sheets. That was in excess of $ 13 billion a year earlier, before the pandemic hit.
What it gives: Although these airlines earned $ 115 million a day over the past nine months of 2020, easy loans have allowed them to consolidate their finances.
As a troubled family flooded with credit card deals, airlines have many people on Wall Street eager to lend them money or help them raise funds from investors. Minimum interest rates play an important role.
“Liquidity is at record levels,” said Philip Baggaley, chief credit analyst at Standard & Poor’s airline industry. “He’s fine, and he’s one of the few strengths they have right now.”
In addition to selling bonds and taking out loans, airlines have mortgaged their planes, frequent flyer programs and other assets, and even sold additional shares of stock, an unusual move for an industry in crisis. In the meantime, they have made profound cost reductions.
“I think the general feeling is that they are hurt, but they will get it,” Baggaley said.