Oil Energy Thread (oih)

[madrose1]

Big worries for big oil - WSJ

WSJ reports Exxon Mobil (XOM), Royal Dutch Shell (RDS.A), BP (BP) and ConocoPhillips (COP) have all relied on big oil-price jumps to fuel a streak of handsome earnings gains and, in many cases, record quarterly profits in recent years. Many of the world's biggest publicly traded oil cos report earnings this week and are expected to post strong results, thanks to high crude prices. Since July, though, crude prices have fallen about 25%, sapping the momentum from short-term profit-growth potential at a time of rising costs and higher taxes. And if oil prices continue to drop, that could drive new thinking among oil execs over whether to pursue big tie-ups. If oil prices stabilize or drop further, cost inflation could also subside. But costs generally take time to catch up with swings in commodity prices. That poses a growing challenge to profitability in the short term. If prices continue falling, two other big questions for investors may emerge: Will the world's largest oil cos curb their generous share-buyback programs? And will they start looking for acquisitions, now that share prices have fallen along with commodity mkts, making some targets look cheaper?