Logic is Faded for Exxon Mobile Megamerger by Chevron

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Exxon Mobil

and

Chevron,

the two largest U.S. oil companies, citing a megamerger last year that left the U.S. with one oil giant for the first time in decades, reports The Wall Street Journal. A $ 300 billion or so company contract could create seven million barrels of oil and the like every day, making it the largest outside operator

Saudi Aramco.

The Journal says talks are off, but could resume. Both companies declined to comment.

The two even consider coming together as a sign of how the industry has changed. Negotiations reportedly began when oil prices fell last year. Prices have since rebounded. Analysts were concerned that Exxon’s cash flow would not cover its share, which occurred in 2019 and 2020. But higher prices and cost cuts could allow it to self-finance the share.

In 1999, the merger of Exxon and Mobil reached a stage of growth. “There was a lot of new [drilling] opportunities in Venezuela, Qatar, Kazakhstan, and Angola that needed capital, ”wrote Citi analyst Alastair Syme. “Unions have given the industry a chance to compete. ”

Today, major producers are cutting back and focusing on reducing balance rates. And, as CFRA’s Stewart Glickman wrote, a union would be unlikely to drive price power, with the new entity consuming just 7% of global oil production, 15% of U.S. refinancing capacity. That said, strange things have happened. Exxon suffered a major loss in the final quarter, the fourth in a row. Active investors face a challenge, and analysts are looking for ways to improve returns. The conversations could begin.

Last week

The higher ground

Stocks rose, offsetting the loss of the previous week, driven by the Nasdaq and tech. Employment was strong, led by higher quarters from Alphabet and

Amazon.com.

Oil giants reported losses, among them

Exxon Mobil‘s

$ 20 billion.

Motor Motor

and

General motors

hit by chip shortages. And January saw a moderate pop in new jobs, after several months of recession. For the week, the Dow trades rose 3.9%, to 31,148.24; the S&P 500, hitting another high, rose 4.6%, to 3886.83; and the Nasdaq rose 6%, to 13,856.30, also a record.

The Downside

Hedge funds escaped short plays

GameStop

and stocks with other high short interest rates, and prices and volatility went to ground. Investors were opposed to decisions about when, or if, to sell. GameStop lost 80% and

AMC Entertainment,

49%. Robinhood raised another $ 2.4 billion from investors— $ 3.4 billion in a week. Meanwhile, day traders on Reddit were driving money up to the highest point in eight years, and then seeing it slip as the

CME Group

has implemented higher margin requirements.

Going big

President Biden met with GOP seniors who offered a one-third relief plan of the $ 1.9 trillion he had proposed; he suggested that compromise was possible. Senate Democrats then pass the bill as a budget issue, thus allowing a direct majority to pass it. The administration says it will increase Covid-19 vaccine doses weekly to more than 11 million, and use 40,000 drug stores for distribution.

Johnson & Johnson

application for emergency use permit for the single-dose vaccine.

New face of Antitrust

Sen. Amy Klobuchar, head of the anti-trust subcommittee, introduced a comprehensive rethinking of trust law, highlighting Big Tech, particularly the Alphabet and

Facebook,

already facing federal lawsuit.

The Defense

Former President Trump lost one legal team for his impeachment lawsuit, apparently over disagreements over strategy and taxation. Minutes from his new team argued that it is illegal to impeach a former president and his First Amendment had the right to express his election suspicions. The trial is set to begin on Tuesday.

Biography about making contracts

The Wall Street Journal reported that Exxon Mobil and

Chevron

we talked about a $ 300 billion union last year. The conversations were initial and could resume… The construction company frenzy followed a specific purpose. Former Boeing CEO Dennis Muilenburg plans to raise $ 200 million for SPAC. Astra Space rocket maker, backed by Marc Benioff of Salesforce and former CEO of Google Sch Erict; Wheels Up, an online jet booking book; Fertitta Holdings, parent of Golden Nugget casinos and Landry restaurants; and 23andMe start DNA testing team up with SPACs to go public … Kraft Heinz could sell Planters Peanuts to

Hormel Food.

Write to Avi Salzman at [email protected]