Friday, November 22nd, 2019 Oil prices rebounded midweek on...

Friday, November 22nd, 2019 Oil prices rebounded midweek on signs of a tighter physical market and more rumors that OPEC+ would extend the production cuts. But the market is still awaiting direction from the U.S.-China trade war – every utterance in either direction regarding tariffs has an immediate price impact. For now, markets are optimistic, but still cautious.

ExxonMobil’s credit outlook cut on high spending. Moody’s Investors Service cut ExxonMobil’s (NYSE: XOM) debt outlook to negative, due to a “substantial” cash burn. The oil major is taking on debt in order to finance a heavy spending program, aimed at ramping up development in Guyana and the Permian, and the company is borrowing to cover its dividend.

“The company’s high level of growth capital investments cannot be funded with operating cash flow and asset sales at projected levels given ExxonMobil’s substantial dividend payout,” Moody’s said. The ratings agency projects Exxon’s negative cash flow at $7 billion this year and a further $9 billion next year.

Exxon to sell $25 billion in assets. In part because of high spending, ExxonMobil plans to sell $25 billion in assets across the globe in order to free up cash. Exxon will focus on a handful of major projects in Guyana, Mozambique, Papua New Guinea, Brazil and the United States.