<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Wednesday, June 10, 2020” data-reactid=”16″>Wednesday, June 10, 2020
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. ” data-reactid=”17″>Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Subscribe” data-reactid=”18″>Subscribe
When the industry is in secular decline, recessions accelerate trends.
A common phrase that has become received business wisdom in this pandemic crisis is that 10 years of change will happen in one year.
Some of the early returns on this are mixed.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Shares of Zoom (ZM), for instance, have gone up a lot as people do more video calls. Amazon (AMZN) and Netflix (NFLX) shares have outperformed amid increasing demand for at-home deliveries and at-home entertainment.” data-reactid=”22″>Shares of Zoom (ZM), for instance, have gone up a lot as people do more video calls. Amazon (AMZN) and Netflix (NFLX) shares have outperformed amid increasing demand for at-home deliveries and at-home entertainment.
But not all changes forced upon us because of shelter-at-home policies and concerns about public health seem likely to stick around.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Working from home, for example, is fine for a bit. And indeed, some tech companies like Twitter (TWTR) will give employees the option to work from home on a permanent basis. Other tech leaders including Google (GOOGL) CEO Sundar Pichai, however, have expressed some skepticism that distributed workforces will be the rule instead of the exception in the future.” data-reactid=”24″>Working from home, for example, is fine for a bit. And indeed, some tech companies like Twitter (TWTR) will give employees the option to work from home on a permanent basis. Other tech leaders including Google (GOOGL) CEO Sundar Pichai, however, have expressed some skepticism that distributed workforces will be the rule instead of the exception in the future.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="And with the arrival of summer and broad state reopenings in the U.S., we see consumers returning to restaurants, casinos, and traveling. In recent weeks, airline, casino, and cruise stocks have rebounded sharply as investors cast doubt on the idea that our post-COVID future will look nothing like the past. And this coming despite the virus still spreading at a faster rate in several states.” data-reactid=”25″>And with the arrival of summer and broad state reopenings in the U.S., we see consumers returning to restaurants, casinos, and traveling. In recent weeks, airline, casino, and cruise stocks have rebounded sharply as investors cast doubt on the idea that our post-COVID future will look nothing like the past. And this coming despite the virus still spreading at a faster rate in several states.
But for industries already in the midst of secular upheavals, the coronavirus pandemic does indeed seem to be an accelerant for permanent change in the way that pundits predicted.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Few industries entered like the 2020s facing a decade of transformational change quite like big oil.” data-reactid=”27″>Few industries entered like the 2020s facing a decade of transformational change quite like big oil.
And the industry’s pandemic response has indeed been swift and large-scale.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On Monday, BP (BP) said that it would lay off 15% of its workforce, or about 10,000 of its 70,100 employees, according to Reuters.” data-reactid=”29″>On Monday, BP (BP) said that it would lay off 15% of its workforce, or about 10,000 of its 70,100 employees, according to Reuters.
Reuters added that BP CEO Bernard Looney told staff, “It was always part of the plan to make BP a leaner, faster-moving and lower-carbon company.” A BP spokesman added that the pandemic “amplified and accelerated” BP’s transition plans, according to Reuters.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Other companies in the energy space including Chevron (CVX) and Royal Dutch Shell (RDS-A) among others have also announced planned reductions in their workforce.” data-reactid=”31″>Other companies in the energy space including Chevron (CVX) and Royal Dutch Shell (RDS-A) among others have also announced planned reductions in their workforce.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Goldman Sachs strategists highlighted commentary from Schlumberger’s (SLB) earnings call in a report last month after management told analysts that, “we have accelerated our remote operation and automation of some of our operations. In the month of March, we had more than 60%, 6-0, 60% of our drilling [operations]…that were using remote operation.”” data-reactid=”32″>Goldman Sachs strategists highlighted commentary from Schlumberger’s (SLB) earnings call in a report last month after management told analysts that, “we have accelerated our remote operation and automation of some of our operations. In the month of March, we had more than 60%, 6-0, 60% of our drilling [operations]…that were using remote operation.”
Because while the price of oil has rebounded over the last six weeks following the unprecedented move into negative territory in April, the industry is still facing a future in which demand for oil will be lower while demands for reducing negative climate impacts will be higher.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The rally in stocks like Nikola (NKLA) and Tesla (TSLA) — while certainly part of a mania sweeping through the retail segment of the market — can also be seen as part of a future in which the shift to clean energy is less talk and more action.” data-reactid=”34″>The rally in stocks like Nikola (NKLA) and Tesla (TSLA) — while certainly part of a mania sweeping through the retail segment of the market — can also be seen as part of a future in which the shift to clean energy is less talk and more action.
And a future that may indeed bring a decade’s worth of changes to big oil in the next year alone.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="By Myles Udland, reporter and co-anchor of The Final Round. Follow him at @MylesUdland” data-reactid=”36″>By Myles Udland, reporter and co-anchor of The Final Round. Follow him at @MylesUdland
What to watch today
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Economy” data-reactid=”38″>Economy
-
7 a.m. ET: MBA Mortgage Applications, week ended June 5 (-3.9% prior)
-
8:30 a.m. ET: CPI month-on-month, May (0.0% expected, -0.8% in April); CPI excluding Food & Energy, May (0.0% expected, -0.4% in April); CPI year-on-year, May (+0.3% expected, +0.3% in April)
-
2 p.m. ET: Monthly Budget Statement, May (-$625 billion expected, -$737.9 billion in April)
-
2 p.m. ET: Federal Open Market Committee (FOMC) rate decision
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="READ MORE” data-reactid=”44″>READ MORE
Top News
<h3 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="FOMC Preview: Fed to focus on taming the yield curve [Yahoo Finance]” data-reactid=”57″>FOMC Preview: Fed to focus on taming the yield curve [Yahoo Finance]
<h3 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="China factory gate deflation deepens on global demand slump [Reuters]” data-reactid=”58″>China factory gate deflation deepens on global demand slump [Reuters]
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Software firm Duck Creek raises $230 million ahead of IPO [Bloomberg]” data-reactid=”59″>Software firm Duck Creek raises $230 million ahead of IPO [Bloomberg]
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="CrossFit CEO steps down after George Floyd tweet [Yahoo Finance]” data-reactid=”60″>CrossFit CEO steps down after George Floyd tweet [Yahoo Finance]
Add Comment