47.85 0.00 (0.00%)
After hours: 4:17PM EST
|Bid||46.00 x 2900|
|Ask||0.00 x 800|
|Day's Range||47.10 - 48.14|
|52 Week Range||43.10 - 52.62|
|Beta (3Y Monthly)||0.59|
|PE Ratio (TTM)||34.47|
|Forward Dividend & Yield||2.52 (5.35%)|
|1y Target Est||46.53|
Making use of a new technology called Wolfspar, British Petroleum has now identified an additional 1 billion barrels of oil in place at its Thunder Horse field
Almost nine years after tearing itself and the Gulf of Mexico apart with the Deepwater Horizon explosion, BP (NYSE:BP) is ready to go again. The company claimed breathlessly this week it has found "a billion barrels of oil" in a previously explored region 150 miles south of New Orleans, and plans to spend $1.3 billion pumping as much as 38,000 barrels per day from it next year. The field is called Thunder Horse. The usual suspects insist this makes BP stock a "buy." InvestorPlace - Stock Market News, Stock Advice & Trading Tips But is this a good place to invest your money? BP stock is dirt cheap, with a market cap of $134 billion on what could be $300 billion of 2018 revenue, while Exxon Mobil (NYSE:XOM) is worth $305 billion with almost the same revenue. Bargain, right? Not necessarily. ### BP's Condition Today BP's books show $55 billion in long-term debt, against just $19 billion for Exxon Mobil. CEO Bob Dudley, who was managing director at the time of the 2010 disaster, is crediting "advanced seismic technology" for the new find, but BHP (NYSE:BHP), the minority partner in what's called the Atlantis rig, has yet to make a final decision on new investment. * 10 Stocks You Can Set and Forget (Even In This Market) The Atlantis rig has a lot in common with the one that failed. It operates in over 7,000 feet of water and can produce 200,000 barrels of oil and gas per day from a platform the size of two soccer fields. Dudley insists the production will be wildly profitable, even though there are many other producers there and a 14-year old spill nearby is still leaking. In fact, big oil finds are becoming routine. Exxon itself recently began drilling what it calls a 5 billion barrel field off Guyana. Royal Dutch Shell (NYSE:RDS.A, NYSE:RDS.B) and Chevron (NYSE:CVX) also announced major finds in the Gulf of Mexico last year. New plays in West Texas and New Mexico have added a potential 46.3 billion barrels to the Permian field bonanza, which analysts are calling bad news for OPEC and other exporters. New technology means oil may not be nearly as rare as people have been suggesting. America's known oil reserves have doubled and the potential global supply could also double. ### The Demand Side At the same time, demand for oil is peaking. Electric cars are replacing traditional gasoline engines faster than previously estimated. The International Energy Agency, whose 2015 analysis was wildly optimistic on the demand side, now insists planes and ships will keep demand rising into the 2040's, but admits demand from cars should peak in the middle of the 2020's. Italy's gasoline demand has been cut in half over the last decade. Supplies of renewable energy, mainly solar and wind, should total nearly 16 million megawatts this year, and while incentives to install renewables are going away, costs are falling below those of fossil fuels. The cost of utility-scale solar energy is now down to 3.5 cents per watt and continues to go down. ### The Bottom Line on BP Stock BP may be partying like it's 1999, but the energy world has changed. New technology is finding more oil and renewable energy prices are continuing to decline. Yet BP faces the same risks and costs in exploiting its new Gulf of Mexico find as it faced 20 years ago. * 7 5G Stocks to Buy as the Race for Spectrum Tightens The BP stock price is down 17% over the last five years, while the average stock in the S&P 500 is up 40%. The price of the shares is little changed from where they were in the wake of the Deepwater Horizon disaster. The company's annual dividend of $2.46 per share currently yields 6.45%, and that's good. But that's the only reason you should own BP stock. Despite the hype, talk of oil riches is very 20th century. Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing, he did not hold a position in any of the aforementioned securities. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks to Buy for Winning the Online Battle * The 7 Best Stocks in the Entrepreneur Index * 7 5G Stocks to Buy as the Race for Spectrum Tightens Compare Brokers The post Why BP Will Never Learn and Never Change appeared first on InvestorPlace.
Why Goldman Sachs Expects Iron Ore Prices to Drop to $60 ## Resilient iron ore prices As we noted in Is the Party Over for Commodities as China Steel Feels the Heat? in November, iron ore prices started collapsing after Chinese steel mills’ margins gave way. In iron ore’s typical price pattern, prices once again started rising and increased ~11% in December. Prices have rallied back to over $70 per ton. ## Goldman Sachs says prices could drop to $60 According to Bloomberg, in a note released today, Goldman Sachs (GS) analysts, including Hui Shan, stated that while the industry’s fundamentals have improved, more supply is on the way, which should restrict the rise in prices. The bank expects iron ore prices to fall to $60 per ton in the next six months. Goldman’s analysts argue that $75 per ton for iron ore is not sustainable for two reasons: “First, part of the rally was fueled by mills restocking ahead of the Chinese New Year. Second, supply is set to increase in 2019.” ## Downside ahead for iron ore? Morgan Stanley (MS) also expects to see losses in the commodity (XME). On January 7, it said, “We’re iron ore bears from here, though, expecting falling crude steel output and growing seaborne supply to ultimately bring price back to the mid-low-$60s/ton.” Moreover, big miners such as Vale (VALE), BHP (BHP), and Rio Tinto (RIO) have been enjoying higher premiums on higher-grade ore due to China’s switch in a bid to control pollution. This switch was supported by higher margins. As margins have waned, it seems like the party might be over for iron ore miners, at least in the short term. The producers of metals such as copper (FCX) and aluminum (AA) have also been under pressure due to China’s muted demand outlook. You can read Why Iron Ore Is Bucking Falling Price Trends Unlike Other Metals for more on this topic.
With global electric vehicle (EV) demand growth creating the potential for tight supplies in battery metals such as cobalt, multinational companies and industrialized nations are working to secure these critical metals as prices are projected to rise. The growing market for electric vehicles has led to much higher demand for battery metals such as cobalt, lithium and nickel. As the largest producer of EVs and largest consumer of battery metals in the world, China is aggressively looking to secure additional supplies of these critical minerals.
The company has approved Phase 3 of the Atlantis platform's development, expected to add 38,000 barrels of oil equivalent per day to production.
Investing.com - Asian markets rose in morning trade on Monday, with Japan’s Nikkei 225 jumping 3%, as an easing of monetary policy in China triggered a renewed appetite for risk assets.
European markets’ 2019 debut was negative on Wednesday, as a poor day of trading in Asia and gloomy investor sentiment weighed on stocks.
As of December 21, Vale (VALE) had returned 5.5% year-to-date. While the stock’s gains haven’t been much in absolute terms, it has outperformed most of its close peers. In the same period, Rio Tinto (RIO) has returned -9.8%, BHP (BHP) has returned 2.4%, and Freeport McMoran (FCX) and Glencore (GLNCY) have fallen 47.2% and 32.8%, respectively.
Among the three major seaborne iron ore miners we’re discussing in this series, Vale (VALE) stock has the highest percentage of “buy” ratings from 78% of the analysts covering it. At the end of April, 56.0% of analysts had “buy” ratings on the stock. Approximately 18.0% of analysts have given it “holds,” and 4.0% have given it “sells.” Vale’s target price suggests a potential 32% upside based on its current market price.
Rio Tinto (RIO) (TRQ) stock has returned -9.8% YTD (year-to-date) as of December 21. Similar to BHP Billiton (BHP) stock, it fell 2.6% in the first quarter, but as commodity prices firmed up, miners’ stocks picked up in April. Rio Tinto’s stock price has lagged those of its peers, including BHP Billiton and Vale, primarily due to its lack of catalysts. In 2018, analysts expect Rio Tinto’s revenue to show flat growth over 2017, coming in at $40 billion.
Of the 16 analysts covering Rio Tinto (RIO) stock, 62.0% have given it “buys,” 25.0% have given it “holds,” and 13.0% have given it “sells.” Its ratings have remained more or less the same for the last few months. Of the analysts covering BHP Billiton (BHP) and Vale (VALE) stocks, 39.0% and 78.0% have given them “buys,” respectively. Cleveland-Cliffs (CLF), which is mainly exposed to the US domestic market, has “buy” recommendations from 64.0% of the analysts covering its stock. Analysts generally expect its premium to come down compared to those of its peers due to the lack of any significant catalysts.
BP will utilize proceeds from divestment program to partially finance the recent purchase of other U.S. resources from BHP Billiton Limited (BHP), per Reuters.
Is Freeport-McMoRan Worth a Look Now? Copper prices are seen as an indicator of global economic activity. While copper fell below the psychologically crucial $6,000 per metric level a few times in 2018, it managed to hold that level in the recent market crash.
Is Freeport-McMoRan Worth a Look Now? As we noted in the previous part, mining companies including Freeport-McMoRan (FCX), Vale (VALE), and Southern Copper (SCCO) are having a somber year. While there have been growth concerns across the globe, China’s slowdown has been the biggest challenge for metals and mining companies.
Freeport-McMoRan (FCX), the leading US-based copper miner, has been struggling in 2018. The stock has fallen 44% year-to-date based on its closing prices on December 18. Other copper miners have followed copper lower. Diversified miners including BHP Billiton (BHP), Rio Tinto (RIO), and Vale (VALE) have also come under pressure. There have been more concerns about the Chinese economy.
Concerns over rising interest rates and expected further rate increases have hit several stocks hard since the end of the third quarter. NASDAQ and Russell 2000 indices are already in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by about 4 percentage points in the first half of […]
Due to China’s slowing economy and weaker credit growth, market participants have been expecting the government to take aggressive policy action, including a rate cut. In this article, we’ll see how China’s credit growth data are progressing. The data for China’s credit indicators for November were released by its central bank on December 11.
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more Read More...
Chinese steel producers have finally come under pressure after reaping significant benefits over the last three years. In November, steel mills ran losses as steel prices entered into bear territory. The current uptrend for steel mills started when Chinese authorities removed high polluting capacity starting in 2016.
China’s (FXI) steel production hit another record in October, coming in at 82.6 million tons and marking the third consecutive month of gains for the country. While China (MCHI) produced record steel on a monthly basis, the average daily output in October was lower than in September, according to Reuters’ calculations. China’s production for the first ten months of the year totaled 782.5 million tons, a rise of 6.4% over the same period last year.
China’s steel prices entered a bear market in late November, with the most active rebar contract on the Shanghai Futures Exchange falling 21% since hitting a seven-year high in August. At present, the most active May rebar contract is trading 18% down from its August peak.
China consumes more than 70% of seaborne-traded iron ore, so it’s important for iron ore investors to track the country’s demand and outlook to gauge the overall outlook for iron ore. China imported 86.25 million tons of iron ore in November, implying declines of 8.8% YoY (year-over-year) and 2.4% sequentially—and marking its second straight month of decline. This weakness has been weighing on the demand for imported iron ore.
Currently, Vale (VALE) is trading at a forward EV-to-EBITDA multiple of 4.9x, which is a discount of 23% to its past five-year average multiple. Diversified miners (GNR) Rio Tinto (RIO) and BHP Billiton (BHP) are trading at similar multiples of 5.5x and 6.1x, respectively.