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U.S. Oil Majors Are Outperforming Their European Counterparts


1. US Oil Majors Pull Ahead of Their European Peers

- As European oil companies press ahead with their renewable energy projects and adapt to continent-wide windfall taxes, US oil majors have been outperforming their peers in the high-price environment of the past 12 months.

- While Shell’s 2022 net profits were comparable to ExxonMobil and Chevron, US majors trade at roughly 6 times their expected EBITDA for 2023, twice the average of Europeans.

- This discrepancy has fueled speculation across the Atlantic Basin, boosted by a Citi analytical report, that Chevron or Exxon could acquire some of the European majors.

- However, with US shareholders focusing on high returns and solid dividends and European investors fearful of becoming one-dimensional again, the two sides would most probably each go their own way.

2. Asia Reclaims Its Spot As Top LNG Destination

- Europe’s warmer-than-usual weather has been depressing natural gas prices, seeing Asian spot LNG prices surpass Europe for the first time since January 2022, despite trading around 20 per mmBtu.

- Europe has become a theatre of war between different pricing bases, with the traditionally exchange-traded TTF trading some €4-5/MWh (at €60/MWh) above the EU-appraised LNG reference price.

- As more Asian countries get comfortable with current spot prices, buyers in Thailand, India, and Bangladesh have swiftly ramped up their buy tenders after…

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