How will things change at BP under the new Tony Hayward regime? Since it was announced yesterday that chief exec John Browne had resigned, effective immediately, it’s the question that’s been weighing on all our minds (after “What would a hostile take-over by Rupert Murdoch feel like?” (A. Awkward) and “How can I get this wine stain out?” (A. Club soda and salt)). Luckily, Reuters has some nifty answers (and a few gay innuendos, too, ‘cause that’s how they roll).
First of all, the Starship BP will no longer have a Captain who kind people might refer to as “distinguished looking” (read: old); Hayward is a “boyish-looking 49 year-old.” Point: BP-TH. But don’t start celebrating just yet: Junior apparently has no interest in taking care of his appearance (in stark contrast to the “always immaculately-groomed Browne”), which means no more eye candy at the helm and almost certainly suggests that spa treatments for good employees on the company dime are over. Point: BP-LJB.
Reuters also notes that things may lighten up around the office with the more “down-to-earth” and less “distant” Hayward, which will likely please the staff, until it realizes that Mr. Good Times, who “doesn’t work on weekends apart from some Sunday evenings” and “takes all [his] holidays” is running BP into the toilet. Browne didn’t turn what was essentially a failed company into “the second-largest non-government controlled oil company in the world” by spending time with his wife and two children. Point: BP-LJB. (But also, Point: BP-TH, because who doesn’t love Tequila Tuesdays?)
The former chief exec’s devotion to the environment (Browne was instrumental in getting other oil companies to address global warming and CO2 caps) may also be shelved under Hayward. A spokesperson for BP claimed it would continue its green tech investments, but some people are not certain that Hayward has the same “dedication to green issues or his fondness for the accolades this brought.” A point of contention: some of you may care more about Browne’s use of company money in Boy’s Towne than trees and baby seals and vice versa (of course, this presupposes that Hayward won’t take a page from the John Browne/Todd Thomson School of Company Perks but what the hey, we’ll give him this one). So award this point as you see fit.
New BP boss may bring changes in style [Reuters]
Oil
Daniel Gross doesn’t have much of a reputation as a friend of the Bush administration. So it’s refreshing to see Gross debunking the latest anti-Bush conspiracy. You know, the one where Goldman Sachs and the Bush administration have pushed down the price of gasoline in order to save the GOP congressional majority in the midterm elections. This never made much sense to anyone who understands the markets in oil and gasoline pricing, much less anyone who has spent any time talking to Goldman bankers about politics. (Hint: Goldman is not a rightwing hothouse.)
Anyway, here’s Gross’s takedown of the great gasoline conspiracy.
So, was this engineered by Henry Paulson and Goldman Sachs? It’s doubtful, although Goldman hasn’t done much to dispel questions. The bank hasn’t offered a good reason as to why it decided to reduce the overall weighting of gasoline in the index this summer. Still, the company is hardly a Republican redoubt. There are likely as many Kerry supporters as Bush supporters in the firm’s upper ranks. And if Goldman was trying to manipulate the market for political reasons, it certainly picked an awfully transparent way of doing it. It publicly announced the contours of the changes in advance and gave investors and traders time to plot strategies surrounding the move.
More broadly, though, commodity markets have shown themselves to be beyond the control of presidents, the Saudis, or even Henry Paulson and Goldman Sachs. The world is an increasingly connected, complicated, and volatile place, which makes the prices for commodities that fuel the global economy dependent on a growing range of factors. At root, gasoline is getting cheaper largely because the thing you need to make it—crude oil—has been getting cheaper. And Goldman actually slightly increased the weighting of crude oil in the overall index this summer.
Closer to home, there was plenty of activity in August and September—beyond Goldman’s index maneuvers—that helped push market and retail prices of energy lower. They include: a growing sense that the U.S. economy, the largest user of oil on the planet, has been slowing rapidly and might be headed toward a recession; a shift in the mix of the U.S. car fleet away from trucks and SUVs and toward smaller vehicles; a potential big find in the Gulf of Mexico; a growing boomlet in ethanol and alternative energy; a bust of a hurricane season; and the blowup of a gigantic hedge fund with huge positions in natural gas.
So, the recent fall in energy prices is almost certainly not a Bush conspiracy, just a bit of electoral good luck.
It’s also kind of a strange conspiracy for the left to be raising. If voters discovered that the Republicans were engineering a reduction in gas prices, do you think that they would turn against the GOP? Not likely. They’d probably say, “Hey! Those guys are finally doing something that helps me out. If they can reduce the price of gas, they’ve got my vote.” So the more popular the conspiracy theory gets, the more popular the Republicans will be.
The Oil Conspiracy [Slate]
Peter Cohan at Blogginstocks gathers together various news stories indicating that an October Surprise Iran invasion might be in the works in the weeks leading up to the midterm elections. His suggestion: profit! More specifically:
How can you profit from the October surprise? Well, buying oil company stocks is one way. ExxonMobil Corporation (NYSE: XOM), ConocoPhillips (NYSE: COP), BP plc (NYSE ADR: BP), and Petroleos Brasileiro (NYSE ADR: PBR) are a few that come to mind. And with oil prices below $59, the price of a barrel of oil would climb along with these stocks on news of the Iran invasion.
As we’ve noted before, the Bush administration is highly sensitive to Muslim sentiment and is unlikely to launch an attack during Ramadan. But Ramadan ends in late October—October 24—so make sure you time this thing right.
Could there be an October Surprise? Something to do with Iran? Can you trade on it? [BlogginStocks]
That’s from a comic produced by the Canadian government in October 1975. The rest of it isn’t any better (except for the strange resemblence of “Kevin” to Harry Potter). It’s worth reading just to remember that energy shortage paranoia is not a recent phenemenon. But then again, just because you’re paranoid doesn’t mean Iran isn’t out to get you.
SuperKids [StupidComics.com]
We’re sort of mesmerized by Senator Byron Dorgan’s real time windfall profits calculator:
Not because we think windfall profit taxes are a good idea. Because we like to imagine ourselves the CEO of a gargantuan highly profitable oil company and we enjoy watching our money add up. (Higher! Higher!)
This may not have been what Senator Dorgan had in mind.
Windfall Profits [Byron Dorgan, Senator from North Dakota]
- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
