BHP, Rio Shift to Growth Strategy, Oil’s Rally Might Be Over

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Mining giants BHP Billiton and Rio Tinto Group are both shifting to a growth strategy after years of cost cutting and oil’s rally may be over.

BHP Joins Rio in Growth Shift

BHP Billiton has talked up its future growth options, joining fellow mining giant Rio Tinto in marking a shift in focus after four years of aggressive cost cutting. While big miners are still looking to sell assets to help cut debt or to exit businesses like nickel and coal, they are also preparing for a pick-up in demand as looming supply gaps in at least some commodities sow the seeds for higher prices.

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While the big miners are still looking to sell assets to help cut debt or to exit businesses like nickel and coal, they are also preparing for a pick-up in demand as looming supply gaps in at least some commodities sow the seeds for higher prices.

Oil Rally Loses Momentum

The rally that carried oil prices up by more than $20 per barrel between the middle of January and the end of April seems to have run out of steam for the time being. Spot crude prices, time spreads and refining margins have all showed signs of weakening since the start of this month.

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Reuters’ John Kemp writes that prices for both West Texas Intermediate and Brent Crude recently closed below their 14-day and 20-day moving averages for the first time since early April.

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