Think back only a few years to 2015 – oil prices were at similar levels to today. The oil majors’ upstream financial performance was poor, but their downstream businesses saved the day for overall corporate results.
The benefits of the integrated business model were widely extolled as the collapse in crude prices shifted value to their downstream activities.
Today, the market fears a global recession. The U.S. yield curve has inverted on multiple occasions over recent months – the interest rate associated with U.S. short-term debt is higher than that of long-term debt, which is unusual. In the past, this phenomenon has been observed 12 to 18 months prior to most U.S. recessions.
