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Oil Updates — Crude rebounds; Saudi Aramco to merge two energy trading units; Biden lashes out at refining companies
RIYADH: Oil prices recovered on Thursday from a steep drop in the previous session, supported by tight oil supply and peak summer consumption, after a US rate hike sparked fears of slower economic growth and less fuel demand.
Brent crude futures rebounded $1.10, or 0.9 percent, to $119.61 a barrel by 0202 GMT while US West Texas Intermediate crude futures rose to $116.59 a barrel, up $1.28, or 1.1 percent.
Prices slipped more than 2 percent overnight after the Federal Reserve raised the interest rate by three-quarters of a percentage point, the biggest hike since 1994.
Aramco Trading plans to absorb Motiva Trading
Saudi Aramco is planning to merge two energy trading units, with Aramco Trading Co. due to absorbing Motiva Trading ahead of a potential initial public offering of the business, people familiar with the matter said.
The move to combine the businesses is expected to give potential investors a better sense of the scale of Aramco’s trading and would also allow the state oil producer to simplify financial reporting and cut duplication.
The restructuring is likely to be announced before the end of the year, one of the two people familiar with the matter said. The merger would come four years after Shell Plc exited Motiva Enterprises, leaving Aramco in control of Motiva Trading and Motiva’s refinery, the largest in the US.
Biden blasts oil refiners for record profits on pain at the pump
US President Joe Biden, under pressure over sky-high gasoline prices, on Wednesday demanded oil refining companies explain why they are not putting more fuel on the market as they reap windfall profits.
Biden wrote to executives from Marathon Petroleum Corp., Valero Energy Corp. and Exxon Mobil Corp., and complained they had cut back on oil refining to pad profits, according to a copy of the letter seen by Reuters.
The letter was also sent to Phillips, Chevron Corp., BP and Shell, a White House official, who declined to be identified, told Reuters.
“At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable,” Biden wrote, adding the lack of refining was driving up gas prices faster than oil prices.
(With input from Reuters)
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