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Nearly 50 Democrats in the US Congress on Wednesday called on the Federal Trade Commission to open a thorough investigation into the wave of M&A activity in oil and gas companies, arguing that consolidation could harm competition and drive at higher prices.
The industry is on a $250 billion buying spree in 2023, including Exxon’s $60 billion purchase of Pioneer Natural Resources and Chevron’s $53 billion deal for Hess, and so far this This year Chesapeake Energy agreed to acquire Southwestern Energy for $7.4 billion.
“It is now even clearer that an anticompetitive pattern is developing as big oil companies race to consolidate the Permian Basin and other key American oil fields, and the FTC must take this pattern into account when evaluating each individual transaction,” they said legislators. in their message to FTC Chair Lina Khan.
Nymex Front-Month Crude (CL1:COM) for April delivery is closed +1.2% at $79.13 a barrel, the third-highest closing value this year, and May Brent crude (CO1:COM) finished +1.1% at $82.96/barrel.
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The U.S. Energy Information Administration reported signs of rising fuel demand ahead of the summer season, with a smaller-than-forecast increase of 1.4 million barrels per day in national crude inventories during the week ending March 1, while distillate and gasoline inventories fell much more than expected. expected.
“The decline in gasoline and distillates gets the market’s attention … a wake-up call that we have a very tight market,” Price Futures Group analyst Phil Flynn said.
Additionally, an increase in refinery utilization rate of 3.4 percentage points to 84.9% of capacity “signaled that the low point of the turnaround season has arrived and that refineries are ramping up in a big way in anticipation of the summer season,” Mizuho’s Robert Yawger said.
The data added to early gains driven by Saudi Arabia’s decision to raise prices to Asia and a rally in stocks after Federal Reserve Chair Jerome Powell told Congress that rate cuts remain likely by the end of the year.