Much to the chagrin of snowflakes everywhere, big oil and energy firms are slated to post a quarter of record profits in the coming weeks.
Thanks to the volatility in markets as a result of both Covid lockdowns and the conflict in Ukraine, the first six months of 2022 are slated to be the best on record for many energy majors and traders.
Names like Exxon, Vitol, Glencore, BP, Shell and TotalEnergies are all expected to report "very strong returns", according to a preview put together by Reuters this week.
One source told the news outlet: "It is another record year. LNG outages will be a challenge to everyone and a big challenge to those who rely heavily on U.S. and Russian LNG."
Independent oil trader Gunvor Group and rival Trafigura have already reported record profits, the report says.
Another source told Reuters that "BP did 70-80% better in the first quarter than last year, when trading returns were lackluster compared to a stellar 2020 and 2019". The same source said that the company's trading division was ahead of its targets in Q2.
Both BP and Shell produced record results driven by trading in Q1. Sources also reported that Glencore's energy trading put up "robust" numbers in the first half of the year.
A banking source continued, telling Reuters: "We are seeing similar across the sector with most reporting ongoing strong trading...the initial results year-to-date reflect ongoing record profitability."
Related: Saudi Aramco May Hike Flagship Crude Prices To Record High Over Benchmarks
Recall, we wrote just days ago that oil companies were warning about much higher prices for plenty of time to come.
Exxon's CEO said that global oil markets may remain tight for another three to five years largely because of a lack of investment since the pandemic began.
Chief executive Darren Woods said it'll take time for oil firms to "catch up" on the investments needed to ensure there's enough supply.
Woods was speaking at the Economic Forum in Qatar, which is among the world's biggest exporters of liquefied natural gas and one of few nations that can substantially replace Russian gas supplies to Europe. Firms including ConocoPhillips are investing in a $29 billion project to boost Doha's exports. Several weeks ago it emerged that Exxon is also one of the bidders and Qatari Energy Minister Saad Al-Kaabi, speaking alongside Woods, said the US firm would get a stake.
By Zerohedge.com
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