What's going on?

Some of the world�s largest energy companies, including ExxonMobil, Chevron, and Total, reported on Friday that their profits are continuing to soar this year! But markets appeared to take the upbeat news with a pinch of salt�

What does this mean?

From 2014 to 2016, the Brent and WTI oil prices (closely watched price benchmarks for purchases of oil worldwide) suffered a major collapse amidst concerns about oversupply, falling from over $100 a barrel down to the $20s. After a partial recovery, they have fluctuated back and forth in the $40s and $50s through most of the last year but have been showing a sustained pick up recently. On Friday Brent passed above $60 for the first time in more than two years, thanks to factors like steadily increasing global demand and an agreed cap on supply by OPEC. That�s good news for energy companies with exposure to oil markets, although investors aren�t totally sold on the turnaround.

Why should I care?

For markets: Energy stocks rose on Friday but they could be too dependent on the oil price.

Friday�s earnings left the impression that energy companies� profitability is based more on the oil price than on their strategy or management. In the third quarter, for example, Exxon added $860 million to its earnings thanks to the upswing in the oil price, while its profits related to innovation and expansion in production totaled only $20 million.

For you personally: Time to start bracing for higher energy bills�

Now that the prices of oil and natural gas are creeping up, it�s fairly certain that you�ll see more expensive heating bills or a bigger tab if you�re at the pump. That said, if you live in a developed economy, you�re likely to have a job as unemployment is fairly low and (hopefully) your wages will start increasing more � so you ought be able to compensate for the bulk of those increases!