Oil Trading Bonanza Saves Shell, Employment Benefits Set to Expire, and More

Environmental groups are pressing the Federal Reserve to end its purchases of energy sector corporate bonds as part of its broader effort to support financial markets as the U.S. navigates the severe economic stress of the coronavirus pandemic.

“Through these purchases, the [Federal Reserve] Board is potentially exposing the public to financial losses through credit risk, market risk, and operational risk due to exacerbation of the climate crisis,” according to a letter signed by several groups and that will be sent to Federal Reserve Chairman Jerome Powell and John Williams, leader of the New York Fed.

The letter, signed by Amazon Watch, Greenpeace USA, League of Conservation Voters, Natural Resources Defense Council and Oxfam, will also be sent to several members of Congress.

Exxon Mobil Corp (XOM.N) is preparing deep spending and job cuts, according to people familiar with the matter, as it fights to preserve a 8% shareholder dividend with a multi-billion-dollar quarterly loss looming.

It was unclear how extensive the cuts will be. The largest U.S. oil company slashed this year’s budget by 30% in April, but Chief Executive Darren Woods’s turnaround through rebounding demand and increased asset sales have not panned out and losses are climbing.

On Friday, Exxon is expected to report a $2.63 billion second-quarter loss, according to Refinitiv Eikon data, on sharply lower prices and weaker production, the first back-to-back quarterly losses in at least 36 years. Shares are down 35% so far this year as the coronavirus pandemic has crushed fuel demand.

The secretive oil-trading businesses of Royal Dutch Shell Plc and Total SE saved both European majors from posting losses in the second quarter, bringing a torrent of cash that countered the impact of the coronavirus crisis.

Investors had already been warned that the pandemic hammered almost all parts of the energy giants’ businesses -- from forecourts, to oil and gas production, to the long-term value of assets. But that was offset by gains from speculating on energy markets, the companies said Thursday.

The Senate on Thursday dissolved into partisan bickering over a sweeping economic stabilization package, clashing over dueling proposals but failing to reach an agreement to prevent the expiration on Friday of jobless aid that tens of millions of Americans have depended on for months.

Senate Republicans, on largely party lines, ultimately forced the chamber to begin moving forward with a continuation of the unemployment benefits at a much lower rate, but it was mainly a tactic to compel Democrats, who support maintaining the payments at $600 per week, to go on the record opposing an extension.

Jay Powell for months has signaled to lawmakers they need to provide more emergency relief to prop up an economy rocked by the pandemic. The Federal Reserve chair on Wednesday delivered his closest message yet to an S.O.S.

Powell has carefully avoided appearing to give explicit policy advice to Congress. With the resurgence of the coronavirus stressing an already-fragile recovery and lawmakers mired in disagreement about the size and shape of the next installment of federal aid, the central bank chief suggested urgency is growing for lawmakers to reopen their spending spigot.