Energy

Petrobras Stock Recovers 8% on Some Good News

Offshore drill rig
Thinkstock
Listing all the troubles that have hit Petrobras, formally Petroleo Brasileiro S.A. (NYSE: PBR), over the past several years would take a long time. Better just to look at the price of the stock, which has dropped from a high of over $70 a share in May of 2008 to a recent low below $9.00 a share.

While it may be convenient to lay the blame at the feet of CEO Maria das Gracas Foster, that would not be entirely fair. When she took over in January of 2012, the stock price had already dropped $40 a share. No matter what, she can’t help but do better than that.

Snarkiness aside, Petrobras said in 2011 that it would invest $225 billion developing its offshore fields, the largest new discovery in the western hemisphere since the 1976 Cantarell discovery in Mexico’s portion of the Gulf of Mexico. The plan called for production of 4 million barrels a day by 2014. Last month the company produced an all-time high of 2.58 million barrels a day, up nearly 600,000 barrels a day from a year ago.

The company is also controlled by the Brazilian government, and like essentially every government-controlled oil company, Brazil exercises its control in ways that negatively affect Petrobras profits. For example, Petrobras may sell its refined products only at government-mandated (low) prices that keep the government, the unions and, presumably, most Brazilians happy but play havoc with earnings.

In addition to an indefinite delay in filing its third-quarter financial statements, Petrobras has also gotten entangled in a corruption scandal that could cost it billions of dollars in subsequent write-downs.

One recent bit of good news for Petrobras and investors in all Brazilian firms is that the recently reelected president is considering candidates to be her finance ministers who are widely viewed to be market friendly. How that will actually play out in the months and years ahead remains to be seen.

Petrobras shares traded as much as 8% higher Friday morning, and were trading up 6% at the noon hour, at $10.30 in a 52-week range of $8.80 to $20.94.

ALSO READ: How MLP Funds and ETFs Will Treat Kinder Morgan After the Mergers

In 20 Years, I Haven’t Seen A Cash Back Card This Good

After two decades of reviewing financial products I haven’t seen anything like this. Credit card companies are at war, handing out free rewards and benefits to win the best customers. 

A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges.

Our top pick today pays up to 5% cash back, a $200 bonus on top, and $0 annual fee. Click here to apply before they stop offering rewards this generous. 

 

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.