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July 3, 2020

Coronavirus company news summary – ExxonMobil set for second consecutive loss – Russia to ease global oil output cuts

By Jessica Paige

3 July

Oil and gas major ExxonMobil is set for its second consecutive loss in Q2 as the drop in oil and gas prices after the Covid-19-related lockdowns caused a plunge in fuel demand. According to Reuters, the weaker oil and gas prices will hit earnings at the company’s E&P business by anywhere from $2.5bn to $3.1bn.

Analysts at investment bank Goldman Sachs expect oil demand to return to pre-coronavirus levels by 2022, citing a pick-up in commuting, a shift to private transportation, as well as higher infrastructure spending. Reuters cited the US bank as saying that the global oil demand is expected to fall by 8% this year, rebounding 6% next year and ‘fully recover’ to pre-coronavirus levels by 2022.

Argentine energy company YPF said it was seeking a swap deal on $1bn of international bonds to push back the payments which are currently due in March next year. The latest move comes as the sector has been hit hard by the Covid-19 pandemic, Reuters reported.

Russia’s Energy Minister Alexander Novak said that the country isn’t planning on changing the supply cuts agreement it has agreed with OPEC which is set to expire this month-end. The Organization of the Petroleum Exporting Countries (OPEC), including Russia and other producers, together known as OPEC+, is expected to start easing oil output cuts from next month. Novak also added that oil consumption may not recover to pre-pandemic levels until the end of next year.

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