European oil companies take advantage of the crude oil rally. After a first part of the year characterized by shocks, the ‘black gold’ is heading to close the summer with a significant comeback. The production cuts decreed by OPEC have encouraged the stock market sector, especially the EU ‘big oils’, a group formed by Repsol, BP, Shell, Total, Equinor, ENI, Galp and OMV. The proof is that half of them have already managed to reach annual maximums and others are about to achieve it.
In this sense, values such as TotalEnergies, ENI or Galp stand out, stepping on the accelerator in recent weeks and boosting their valuation, to the point of approaching their potential and even exhausting it. In order, the French company stands out, which recovers from the minimum of 50 euros marked last July and exceeds 61 euros, which directly leads it to break the historical barrier of 60 euros, unprecedented since 2007, once the dividend is deducted. . of capitalization, which acts as a deflator.
It is somewhat more complicated for the Italian to beat this mark, since it would need more than 40% to exceed the 26 euros registered on the stock market before the outbreak of the 2008 financial crisis from the current 15 euros, while in the case of For the Portuguese, the difference would be 25% after accelerating to 13.7 euros that was recorded at the close of the markets this Wednesday.
Within the classification there are also giants such as Equinor, which have the possibility of setting a new record with the 370 Swedish crowns (around 36 euros) in their sights; like the British Shell, which is only 4.1% away from settling at the 2,600 pounds (around 3,000 euros) that it touched in mid-2018.
It thus separates itself from its compatriot BP, whose planes have become complicated after the group’s CEO, Bernard Looney, submitted his resignation after acknowledging that he had not been “transparent” when reporting on his personal relationships with some co-workers. After the setback suffered this Tuesday, the group’s titles remain at 508 pounds (about 590 euros), below the 567 pounds they reached last February.
This list is completed by the Austrian OMV, which breaks away from the pattern accounted for by the majority and corrects 10% from the February peak, to 44.7 euros. At the same time, the Spanish company Repsol, which is trading at a discount of almost 50% from historical highs, seems willing to continue its climb from 15 euros, a figure that analysts value, because it brings it closer to the March peak, as well as well as its target price, stipulated at 16.9 euros.
It should be remembered that these companies are coming off an extraordinary 2022 in which they have made cash at the expense of the energy crisis, which was accentuated after the outbreak of the war in Ukraine. After a few months of ups and downs, the lower pumping of crude oil by OPEC helps oil companies to shine their price and recover the ground lost due to the pandemic, while ‘black gold’ looks askance at $100 .
However, analysts warn that this lower circulation of barrels may lead to unwanted second-round effects. Specifically, Joaquín Robles, XTB analyst, warns that one of the possible scenarios for the increase in the price of a barrel is that inflation remains on the rise and forces central banks to prolong interest rate increases beyond than initially planned, leading to a deterioration in the economy and, therefore, a reduction in fuel demand.
In any case, he considers that the sector faces “good prospects” and has “a good opportunity to maximize profits.” The key to knowing if they will extend the acceleration will be in the presentation of the results corresponding to the third quarter in the face of the failure of the semi-annual accounts in which a general drop in profits is observed due to the lower price of the barrel and the reinforcement of dividends . to compensate shareholders.
eToro’s global market strategist, Javier Molina, agrees in this regard that the rise in oil prices to annual highs represents a double short-term threat to the markets.” In any case, this scenario is subject to conditions such as the maneuvers to be executed Putin and, within the framework of this, the evolution of the war conflict, which has lasted longer than initially expected. From the Swiss manager Julius Baer they focus on the penetration of renewable energy in China, which as the largest consumer of raw materials in the world has the capacity to condition the price of crude oil beyond this short-term rebound.
