Power Up: Big Oil braces for weaker market

April 28 - By Liz Hampton

U.S. energy markets editor

Hello Power Up readers! Oil markets are relatively stable this morning, as investors are weighing economic uncertainty amid trade talks between the U.S. and China and the prospect of OPEC+ raising its output. Brent futures are up 15 cents, trading around $66.72 a barrel, while U.S. West Texas Intermediate (WTI) futures are up 16 cents to trade around $62.86 a barrel. Natural gas futures are up 6%, trading around $3.103 per million British thermal units. The Henry Hub contract will expire today and is being supported by higher demand.

Investors eye buyback risk as prices fall

And a major power outage rocks Spain and Portugal

​

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.

ESSENTIAL READING

China's wind and solar capacity exceeded thermal power for the first time, its energy regulator said on Friday. China had set a goal to raise wind and solar capacity to 1,200 gigawatts by 2030, but met the target six years early last year.

The U.S. is planning an Alaska LNG summit for early June, in hopes that Japan and South Korea will announce commitments to the liquefied natural gas project. Trump has touted the $44 billion project, which has seen limited progress due to costs and the work required. It would deliver gas from Alaska's North Slope fields via an 800-mile pipeline and ship it to customers as LNG.

Germany's RWE, one of the world's top offshore wind developers, has stopped work on its U.S. projects for now following moves against the industry by the Trump administration, its CEO said. This is the latest blow to the nascent U.S. offshore wind market, which was a key pillar of former U.S. President Joe Biden's energy policy.

The World Bank's steering committee has endorsed plans to explore options to expand energy access, including potential financing for nuclear energy. The group also endorsed the lender's gender and equality strategy, just days after U.S. Treasury Secretary Scott Bessent said it had strayed too far from its core development and economic stability mandates and into climate change, gender and inclusion issues.

ByteDance, the Chinese parent of TikTok, is considering a major investment in a data center in Brazil, Reuters exclusively reported on Friday. The project would tap the abundant wind energy in the country's northeast.

We hope you're enjoying the Power Up newsletter. We'd love to hear your thoughts and feedback. You can reach us at: powerup@thomsonreuters.com.

Trying to keep up with the latest tariff news?

Our new daily news digest offers a rundown of the top headlines on global trade. Sign up for Tariff Watch here.