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What’s happening: Shares of ExxonMobil and Chevron gained on Friday, following the release of quarterly results from these oil majors.
What happened: Exxon notched its best-ever start to a year, while Chevron also reported slight profit growth.
Exxon and Chevron recorded profits, exhibiting resilience at a time when oil and natural gas prices moved lower.
How were the results: Both energy giants surpassed market expectations for the first quarter.
Why it matters: Both energy majors generated strong profits not seen since oil prices surged to $145 per barrel in 2008, almost twice the current prices.
The companies have reported solid results over the past four quarters, despite volatility in oil prices. They took cost reduction measures, as crude oil prices fell more than 35% from the previous year’s peak.
Exxon achieved net income of $11.4 billion, its best-ever start to the year, by expanding oil production. Chevron’s profits also grew to $6.6 billion amid a recovery in oil-refining profits due to a rise in fuel demand.
Exxon’s net production rose 4% year-over-year to 3.8 million oil-equivalent barrels per day.
Chevron’s global net oil equivalent production fell 3% to 2.98 million due to a decline in international production. US upstream earnings declined by 45% year-over-year, while international upstream earnings fell 8.6%.
Abundant cash flows at both companies reassured investors of good dividends, despite oil prices hovering around $76 per barrel. Exxon declared a dividend of 91 cents per share for the second quarter, while Chevron announced a quarterly dividend of $1.51 per share.
How shares responded: ExxonMobil’s shares gained 1.3% to close at $118.34, while Chevron shares added 1% to settle at $168.58 on, Friday following the release of quarterly results.
What to watch: Investors will keep an eye on the upcoming driving season in the US, a time when oil prices generally rise. The CME Group expects WTI crude futures to hover between $74 and $76 per barrel this summer.
Context: The CAD/USD forex pair rose on Friday, following the release of GDP data.
Details: Traders assessed the release of GDP data from Canada, which showed the country’s economy expanding lesser-than-expected in February and is also seen contracting in March.
Canada’s gross domestic product grew 0.1% in February, below market expectations for 0.2%. The country’s economic activity is likely to decline 0.1% in March, according to a flash estimate.
The recent data increased prospects of the Bank of Canada holding its interest rates at their upcoming meeting.
Canada’s government budget surplus also widened to C$9.5 billion in February, from C$5.5 billion in the year-ago month.
The country’s economy is expected to expand by 2.5% on an annualized basis during the first quarter. The country’s central bank has projected 2.3% growth in real GDP for the first quarter.
The Bank of Canada was the first major central bank to halt interest rate hikes after increasing rates at a record pace over the past year. The central bank maintained its key policy rate at a 15-year high of 4.50% in April.
A rise in the prices of crude oil, one of Canada’s major experts, also lent support to the Canadian currency on Friday. US WTI crude oil prices gained 2.7% to settle at $76.78 per barrel on Friday.
The CAD/USD forex pair rose 0.33% to 1.3548 on Friday, after earlier falling to its weakest level in one month.
What are expectations: Traders await the release of manufacturing PMI from Canada today. The S&P Global Canada manufacturing PMI, which fell to 48.6 in March, is expected to decline to 48 in April. Jobs data, scheduled for release later in the week, will also remain in focus.
Other Markets: European indices closed higher on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 up by 0.50%, 0.77%, 0.10% and 0.56%, respectively.
A drone strike resulted in a massive fire at an oil depot in Russia-controlled Crimea. The news sent the safe-haven US dollar index higher this morning.
Australia’s Melbourne Institute’s Monthly Inflation Gauge fell to a four-month low of 0.2% in April, following a 0.3% increase in the prior month, which lent support to the AUD/USD forex pair.
Japan’s au Jibun Bank manufacturing PMI remained at a six-month high of 49.5 in April, matching the flash reading. However, the country’s factory activity contracted for the sixth straight month, sending the JPY/USD pair lower in forex trading this morning.
South Korea’s trade deficit widened to $2.62 billion in April, from $2.35 billion in the year-ago period, exerting pressure on the KRW/USD forex pair.
China’s official NBS non-manufacturing PMI fell to 56.4 in April, from March’s reading of 58.2. However, the recent reading still signalled the fourth consecutive month of expansion in the country’s services activity, which sent the CNY/USD pair slightly higher in forex trading this morning.
Australia’s commodity prices, US S&P Global manufacturing PMI, ISM manufacturing PMI and construction spending, as well as Brazil’s balance of trade.
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