It's earnings season again, with U.S. oil majors Exxon Mobil and Chevron reporting later this week. Top oilfield service companies have already released their results, and warned of lower customer spending as well as an impact from U.S. President Donald Trump's trade war.
Halliburton warned that tariffs and lower activity in North America would hit its second quarter earnings, while SLB missed its profit estimates, and said it expected global upstream investment to decline compared to 2024. JP Morgan and others have cut their target price for SLB by $4 since the company reported results.
Some refiners have also reported. U.S. fuelmaker Phillips 66 said its refining unit posted a first quarter loss amid lower margins and heavy turnaround activities. Rival Valero also reported a quarterly loss due to lower refining margins.
Investors are going to be keen to see whether a sharp decline in oil prices will increase the risk to dividends and share buybacks this year, Sheila Dang reports. Some analysts expect Chevron, the second-largest U.S. oil company, to reduce its buybacks if weak oil prices persist. Chevron had previously guided share repurchases between $10 billion and $20 billion.
Several analysts believe that Exxon is in a stronger position to maintain its dividends and share buybacks, due to the surplus of cash on its balance sheet and efforts it has made to drive down costs. Exxon has said it would repurchase $20 billion in shares annually through 2026 and paid $16.7 billion in dividends last year.
Meanwhile, Spain and Portugal on Monday were hit by a widespread power outage that has paralyzed public transport, left hospitals in the dark and people stranded in elevators. The cause of the outage was not immediately known, but a cyber attack had not been ruled out, officials said.
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