The Aug Brent futures flat price has had a reasonably quiet morning trading in a very tight range around $84.30/bbl. It has since seen a minor uptick to $84.65/bbl, where it is currently trading as of 11:00 BST (time of writing). Yesterday evening saw the merger of Hess with Chevron in a $53 billion deal but we are yet to see how this plays out with Hess’ Partners CNOOC and Exxon in Guyana. They are still awaiting regulatory approval on this given the arbitrage opportunities with significant oil discoveries in Guyana. Given that Exxon and CNOOC have first refusal right of the sale of Hess’ assets in Guyana, this dispute filed by the two players will likely prolong the deal’s close into 2025. Regardless, the merger will diversify Chevron’s operations through acquisitions of both the aforementioned Stabroek block in Guyana and more shale assets. Exxon has been making headlines of their own, with former Pioneer Natural Resources CEO Scott Sheffield coming under fire for collusion allegations with OPEC. The response from Sheffield this week denies the allegations and suggests this restricts executives from addressing shareholder demands and “advocating for their industries”. While this is yet to be seen, further M&A activity in this sector will likely come under additional scrutiny from the FTC in response to this. Lastly, the Aug/Sep and Aug/Feb spreads are $0.44/bbl and $3.14/bbl, respectively.
