 "A gas pump is seen hanging from the ceiling at a petrol station in Seoul. Photo: Reuters")
After two tough years of falling oil prices and company valuations, investors in the world’s biggest energy producers have some cause for hope as crude prices continue their recovery from a 12-year low. They will be looking to Opec not to dash it.
Oil companies around the world have together added $490 billion to their market value this year, the biggest gain in six years following a 25 per cent rise in benchmark Brent crude, according to data compiled by Bloomberg. This follows a $850 billion loss in value last year and $720 billion in 2014 as crude prices plunged.
The oil slump has hammered oil producers around the world, from giants like Royal Dutch Shell to exploration minnows. They have piled on debt, cancelled billions of dollars of projects and slashed jobs to ride out the downturn. In September, the Organization of Petroleum Exporting Countries gave these companies hope by reversing a two-year policy of pumping at full throttle and agreeing instead to cut production. Yet, the group is struggling to overcome obstacles to implementing the deal. “We all know what the oil companies are hoping for — a cut,” said Brendan Warn, a managing director at BMO Capital Markets in London.
