Pre-market stocks: Global oil prices have fully recovered from the pandemic

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What’s happening: Brent crude futures, the global benchmark, have surpassed $ 60 a barrel, their highest level since January 2020.

The immediate catalyst appears to be President Joe Biden’s weekend remarks that the United States will not lift sanctions on Iran to bring the country back to the negotiating table. But oil prices have been on the rise for months thanks to optimism that coronavirus vaccines will release demand as producers avoid flooding the market with supply.

“With the decline of Covid-19 cases in some regions, including the US and UK, there will be a silver lining that the worst is now behind us, particularly as the rollout of vaccinations resumes ”Said Warren Patterson, ING commodities strategist. and Wenyu Yao said in a recent note to customers.

There are also significant signs of recovery in demand in high-growth economies like China, India and Brazil, Giovanni Staunovo, oil analyst at UBS, told me.

The demand path is “definitely pointing upwards,” he said.

Meanwhile, producers are working hard to control supply so that there can continue to be a significant reduction in stocks, which filled up last year.

The Organization of the Petroleum Exporting Countries and its allies agreed to keep production broadly stable in February and March, while Saudi Arabia said it will voluntarily cut production by 1 million barrels per day from levels January.

American producers, for their part, should need more time to get up to speed.

“Investment activity has been relatively subdued, and it will still take time to see a bigger impact,” Staunovo said.

Overall, this is good news for the prices. The trend has supported shares of oil companies like Exxon and Chevron since November.

That said: These stocks remain well below their pre-pandemic level, underscoring the long way to go.

If investors are worried that asset prices have moved too high, too quickly, stock and oil prices could come under pressure. And demand forecasts remain murky, especially as newer coronavirus variants complicate time to return to normal.

AstraZeneca said over the weekend that its Covid-19 vaccine showed limited protection against the variant first identified in South Africa. He’s working on developing a new version that he could roll out this fall.

Remember: Last month, the International Energy Agency downgraded its forecast for global oil demand in 2021, citing “further lockdowns in a number of countries” that would weigh on sales of fuel. Oil companies are also locked in a serious debate over whether demand can ever fully rebound. In the next 12 months, the picture looks clearer, but with many unknowns.

Hyundai and Kia: we don’t talk to Apple about a car deal

Actions of Hyundai (HYMTF) and Kia plunged on Monday after South Korean automakers said they were not in talks with Apple to develop self-driving cars, closing the door to weeks of speculation.
Hyundai, Kia say they are not talking to Apple about self-driving cars

“We are not in discussions with Apple on the development of self-driving cars,” Hyundai said in a statement.

The statement added that Hyundai has received inquiries from “many companies” regarding the development of self-driving electric cars, but that “no decision has been taken as we are in the early stages.” Apple declined to comment, my CNN Business colleagues Jill Disis and Gawon Bae report.

The announcement rocked investors who had bet on some sort of tie-up between the companies following reports. Kia stock fell nearly 15%, its worst day since at least 2001, according to data provider Refinitiv. The fall erased $ 5.4 billion from its market value.

Hyundai shares fell more than 6%, losing about $ 2.8 billion in market value.

Apple’s interest in South Korean automakers made sense. Analysts stressed that Hyundai was open to joining forces with tech companies. It already has partnerships with Chinese research giant Baidu and US chipmaker Nvidia on autonomous driving, for example.

The big question: If Apple is going ahead with its car, the prevailing wisdom is that it would choose to work with an experienced manufacturer. But who? Analysts have also offered Honda and Volkswagen as possible options, and attention may now turn in that direction.

Despite huge losses, US airlines roll in cash

The US airline industry has just closed the books on the worst year in its history. But carriers still ended 2020 inundated with cash, reports my CNN Business colleague Chris Isidore.

The nation’s four largest airlines – American, Delta, United and Southwest – closed last year with a collective $ 31.5 billion in cash on their balance sheets. That’s $ 13 billion a year earlier, before the pandemic hit.

Which gives: Although these airlines spent $ 115 million per day in the last nine months of 2020, the borrowing facility has allowed them to consolidate their finances.

Like a struggling family inundated with credit card offers, the airlines have plenty of people on Wall Street eager to lend them money or help them raise money from investors. The lowest interest rates play an important role.

“Liquidity is at record levels,” said Philip Baggaley, chief airline credit analyst at Standard & Poor’s. “It’s good, and it’s one of the few strengths they have at this point.”

In addition to selling bonds and taking loans, airlines have mortgaged their planes, loyalty programs and other assets, and even sold additional stocks, an unusual move for an industry in crisis. During this time, they have significantly reduced their costs.

“I think the general feeling is that they are injured but they are going to be okay,” Baggaley said.

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Hasbro (AT) reports results before the US markets open.
Coming tomorrow: revenues include Twitter (TWTR), Nissan (NSANF), Honda (HMC) and Total (UNTIL).

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