Exxon Leads Oil Inventories Higher as Crude Gains, Shell Boosts Yields
Exxon Mobil (XOM) – Get the Exxon Mobil Corporation report lead US oil inventories higher on Wednesday as crude resumed its march to seven-year highs and European rival Royal Dutch Shell (RDS.A) unveiled plans to increase dividends and share buybacks.
Shell told investors in London on Wednesday it would increase shareholder returns to between 20% and 30% of free cash flow, starting with a payout from second quarter profits, while keeping its capital spending plans at $ 22 billion. The Anglo-Dutch oil major has also revised upwards its production forecasts, sales volumes and production of natural gas.
“In conjunction with the increased distributions, Shell will withdraw its net debt milestone of $ 65 billion and continue to focus on further strengthening its balance sheet and AA credit metrics,” Shell said.
Exxon shares rose 0.4% in pre-market trading to indicate an opening bell price of $ 61.61 each, a move that would take the share’s year-to-date gain to around 49.5%. Chevron (CVX) – Get the report from Chevron Corporation shares, meanwhile, rose 0.13% to $ 104.12 each while ConocoPhillips (COP) – Get the ConocoPhillips report was marked 1.2% higher at $ 61.00 each.
U.S.-listed Shell shares, which trade on the New York Stock Exchange, jumped 1.1% to $ 41.20 each and are up 17.25% year-to-date.
These measures follow a sustained recovery in world crude prices, which are testing the highest levels in three years, amid a noticeable rebound in post-pandemic energy demand and ongoing supply restrictions. ‘OPEC.
Cartel leaders failed to come to a deal earlier this week that would have eased production restrictions, which currently take 5.8 million barrels off the market every day, by the end of the year.
WTI crude futures for August delivery, the US benchmark, jumped $ 1.22 a barrel in overnight trading to $ 74.59 each, just below the seven-year high reached over earlier this week, while Brent crude was marked $ 1.21 higher at $ 75.74 each.
U.S. crude inventories are dwindling at a record pace, with Energy Department data showing the total strategic oil reserve fell 1.15 million barrels per day over the past month.
Global crude supply fell 6.72 million barrels last week, the Energy Department said, bringing inventories to their lowest levels since March of last year.
Meanwhile, industrial demand is rising: European factory activity rebounded at its highest pace ever last month and similar all-time highs were noted in surveys from the United States and Asia.