What’s happening: Brent’s crude future, the global benchmark, has exceeded $ 60 a barrel, the highest level since January 2020.
“With Covid-19 cases declining now in some regions, including the US and the UK, there will be a glimmer of hope that the worst is now behind us, especially as the relaunch of vaccinations becomes faster,” ING Strategies for 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 certainly “upward,” he said.
Meanwhile, producers are working hard to keep supply under control so that there can continue to be a significant reduction in stocks, which filled last year.
Manufacturers in the United States, in turn, are expected to need more time to return to speed.
“Investment activity has been relatively shut down and it will take a long time to see a greater impact,” Staunovo said.
Taken together, this is good news for prices. The trend has supported the actions of oil companies such as Exxon and Chevron since November.
That being said, such stocks remain well below where they were before the pandemic hit, highlighting the long road ahead.
If investors become concerned that asset prices have moved too high, too fast, both stocks and oil prices could be under pressure. And the demand forecast remains bleak, especially as new coronavirus variants complicate normal deadlines.
Remember: The International Energy Agency last month revised its forecast for 2021 lower global oil demand, citing “renewed bottlenecks in several countries” that would weigh on fuel sales. Oil companies are also embroiled in a serious debate over whether demand can ever return in full. Looking at the next 12 months, the picture looks brighter, but with many unknowns.
Hyundai and Kia: We’re not talking to Apple about a car deal
“We are not in talks with Apple about the development of self-driving cars,” Hyundai said in a statement.
The statement added that Hyundai had received requests from “numerous companies” regarding the development of self-driving electric cars, but that “no decision has been made as we are in the start-up phase”. Apple declined to comment, say CNN Business colleagues Jill Disis and Gawon Bae.
The announcement shook investors who bet on a kind of connection between companies following the news. Kia shares fell nearly 15 percent, the worst day in at least 2001, according to data provider Refinitiv. The fall wiped out a $ 5.4 billion market value.
Hyundai shares fell more than 6%, losing about $ 2.8 billion in market value.
Apple’s interest in South Korean carmakers made sense. Analysts pointed out that Hyundai was open to joining forces with technology companies. It already has partnerships with Chinese search giant Baidu and US chip maker Nvidia in terms of autonomous driving, for example.
The big question: if Apple goes further 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 this direction.
Despite the huge losses, US airlines are running out of cash
The country’s four largest airlines – American, Delta, United and Southwest – closed last year with a total of $ 31.5 billion in cash on their balance sheets. This rose from $ 13 billion a year earlier before the pandemic.
What it offers: Although these airlines have exceeded $ 115 million a day in the last nine months of 2020, light loans have allowed them to consolidate their finances.
As a struggling family, flooded with credit card offers, airlines have a lot of people on Wall Street eager to lend them money or help them raise funds from investors. Lower interest rates play an important role.
“Liquidity is at record levels,” said Philip Baggaley, chief credit analyst for the airline industry at Standard & Poor’s. “It’s good and it’s one of the few strengths they have right now.”
In addition to selling bonds and borrowing, airlines have mortgaged their planes, frequent flyers and other assets and even sold additional shares, an unusual move for a crisis-ridden industry. In the meantime, they have made profound cost reductions.
“I think the general feeling is that they are hurt, but they will,” Baggaley said.