U.S. Gas Prices Surge to Highest Level Since 2024
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Newsfilter
- Price Surge: The average price of unleaded gas in the U.S. has climbed to about $3.54 per gallon, marking the highest level since 2024 and a 21% increase from a month ago, directly impacting consumer living costs.
- Supply Chain Crisis: The conflict between the U.S. and Iran has disrupted the crucial Strait of Hormuz, leading to the largest three-day price jump since Hurricane Katrina in 2005, highlighting the vulnerability of the global oil market.
- Political Ramifications: The rise in gas prices threatens Trump's commitment to lowering living costs, a key pillar of his reelection campaign, which could influence the outcomes of the upcoming midterm elections.
- Market Volatility: U.S. crude oil prices are fluctuating around $84 per barrel after surpassing $100 earlier this week, with analysts indicating that future price movements will depend on the duration of market disruptions.
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Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 153.530
Low
114.00
Averages
132.17
High
158.00
Current: 153.530
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Management Perspective: CEO Darren Woods stated that the move is intended to protect the company from shareholder 'abuse,' particularly regarding frivolous lawsuits prevalent in certain legal venues, believing Texas has a deeper understanding of the oil and gas industry.
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See More
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- Oil Infrastructure Protection: Trump stated he chose not to destroy the oil infrastructure on Kharg Island, although he warned that he would reconsider this decision if Iran or others interfere with the free passage of ships through the Strait of Hormuz, a strategy aimed at avoiding further economic repercussions.
- Geopolitical Risks: Analysts indicate that the prospect of seizing Kharg Island is considered extremely high risk, as the island is regarded as Iran's
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- Surging Oil Prices: The war in Iran has disrupted production, pushing crude oil prices above $100 per barrel for the first time since 2022, with potential for further increases, which could lead to inflation but also boost oil producers' profits.
- Strong ETF Performance: The State Street Energy Select Sector SPDR ETF has surged approximately 29% this year, significantly outperforming the S&P 500, which has declined by 3%, indicating robust performance in the energy sector.
- Quality Stock Holdings: This ETF comprises 22 energy stocks, including top players like ExxonMobil, Chevron, and ConocoPhillips, which together account for nearly half of the fund's portfolio, ensuring safety and potential returns for investors.
- Long-Term Investment Appeal: Despite underperforming the market in the past three years, the ETF is poised for a rebound with rising oil prices, and its low expense ratio of 0.08% and a 2.6% dividend yield make it an excellent long-term investment option.
See More
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- Strong ETF Performance: The State Street Energy Select Sector SPDR ETF (XLE) has surged approximately 29% this year, significantly outperforming the S&P 500, which has declined by 3%, indicating robust performance of energy stocks amid rising oil prices.
- Portfolio Diversification: The XLE ETF holds 22 energy stocks, with ExxonMobil, Chevron, and ConocoPhillips accounting for nearly half of its portfolio; despite the inherent risks from commodity price fluctuations, it offers investors a hedge against rising oil prices while investing in quality stocks.
- Long-Term Investment Potential: Although the XLE ETF has underperformed in the past three years, the current rise in oil prices could serve as a catalyst for recovery, and with a low expense ratio of 0.08% and a dividend yield of 2.6%, it remains an excellent long-term investment option.
See More
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- Strait of Hormuz Closure: Traffic in the Strait of Hormuz has effectively halted due to the outbreak of war, through which about 20% of the world's petroleum consumption passes, with Iran's Supreme Leader stating it will remain closed as a tool to pressure the enemy, significantly impacting global oil markets.
- U.S. Navy Escort Readiness: The U.S. Energy Secretary indicated that the Navy is not yet ready to escort tankers, but expects readiness by the end of the month, which could influence market expectations regarding oil prices and investor confidence.
- Nvidia's Market Support: Despite the potential continuation of the Iran conflict, Nvidia's upcoming GTC conference may provide market support, as analysts express optimism about the company's strategic positioning in AI, likely attracting investor attention amidst broader market uncertainties.
See More
Impact of Strait of Hormuz Closure on Energy Stocks Amid U.S.-Israel-Iran Conflict
- Strait of Hormuz Impact: The closure of the Strait of Hormuz is severely disrupting oil and LNG transport, particularly affecting Qatar's LNG facilities, which shut down early in the conflict, impacting 77 million tons per annum (20% of global capacity).
- Affected Companies: Companies potentially impacted include ConocoPhillips (COP), ExxonMobil (XOM), Shell (SHEL), and TotalEnergies (TTE), which have interests in projects feeding into Ras Laffan, although their investment thesis remains largely intact in the short term.
- Directly Affected Firms: Companies linked to Qatar's LNG exports and Gulf oil/gas production, such as Shell, TotalEnergies, and BP, face direct impacts as their shipments must pass through the Strait of Hormuz, although large integrated oil firms typically benefit from rising oil prices due to their diversified operations.
- Upstream Company Risks: Firms focused primarily on upstream activities, like ConocoPhillips, Occidental Petroleum, EOG Resources, Devon Energy, and APA, may experience sharper earnings volatility due to their lack of refining or chemical operations to balance their business.
See More
