The increase in WTI to $15.1/barrel and Brent to $22.22/barrel boosted the energy sector yesterday, both in Europe (up 5.3%) and in the US (up 3.58%). It also allowed the Stoxx 600 and S&P500 to advance by 1.62% and 2.29%, respectively. The Ibex 35 index also rose, finding a safe haven in Repsol, after some disastrous days. At today’s opening, Repsol shares were trading 2.06% higher.
Despite this small respite, the Spanish oil firm, like the rest of the sector, is struggling between a rock and a hard place, with the effects of the coronavirus and the collapse of the oil price. And it has not been able to escape the latest moves on the part of the Saudi Arabian sovereign wealth fund. The Financial Times has flagged that Repsol is amongst the big European oil companies included in a list of stock market forays on the part of the Public Investment Fund (PIF) over the last few weeks. Different financial sources confirmed the move. In fact, it was mooted that PIF had invested in the Anglo-Dutch Royal Dutch Shell, France’s Total, Italy’s Eni and the former Norwegian Statoil, Equinor. The various shares acquired by PIF would amount to USD 1 billion (just over EUR 900 million).
At end-March, Repsol cancelled the presentation of a new strategic plan scheduled for May 5. Instead, it announced an urgent contingency plan to save costs and reduce investment by more than EUR 3.15 billion.