While it didn't receive a host of attention last week, it was an eventful one for the world of oil and gas.
For instance, Chevron (NYSE: CVX ) , which has been an exploration and production powerhouse of late, announced that it is cutting jobs at several of its refineries as the business of producing gasoline has become both less lucrative and probably less satisfying. More specifically, both U.S. and European refiners have put several units on the block, which has led to excessive capacity amid a period of demand that is stalled at best.
At this point, it's impossible to predict how many job losses will result from Chevron's refinery restructuring. However, the company is hardly alone. Last week, ConocoPhillips (NYSE: COP ) also warned of a loss from its downstream group when it reports its earnings midweek. Indeed, as judged by the past couple of quarters, even mighty ExxonMobil (NYSE: XOM ) is hardly shooting the lights out in the refining and marketing segment. At the same time, refineries have been shuttered by the likes of Valero (NYSE: VLO ) and Shell (NYSE: RDS-A )
But don't despair. It appears possible that President Obama might attempt to impose a fee from countries importing crude and refined products into the U.S. Import rights would be limited to those countries that could demonstrate the ability to measure up to U.S. air emissions standards. Obviously, such an approach clearly would benefit U.S.-based refiners, while maintaining a significant amount of tranquility among environmentalists.
Early discussions have the fees in the vicinity of $1 per barrel of crude, versus the current $0.12. The tab for refined products could escalate to $4 per barrel, from $0.54.
And then there's thrill-a-minute Venezuela, which, as you know, has been soliciting help from the world's major oil companies in the development of its massive Carabobo field in the Orinoco belt. As of last week, it appears that about a dozen companies have expressed interest in the area, including Chevron, France's Total (NYSE: TOT ) , and Spain's Repsol (NYSE: REP ) .
So it was an active week for the oil and gas companies. Unlike some other prognosticators, I continue to believe that crude prices will continue to inch higher in the coming months. Given that expectation, my preferred way to play that trend is through the biggest of them all -- ExxonMobil.
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