Oil Prices Plummet, Yet Oil Stocks Surge Against Trends
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Oil Price Trends: In June 2022, West Texas Intermediate (WTI) crude peaked at $120 per barrel, but has since fallen to $60, reflecting a growing global oil glut that has significantly depressed prices.
- Stock Performance: Despite falling oil prices, ExxonMobil (XOM) shares have risen nearly 13% this year, while Chevron (CVX) has gained almost 10%, significantly outperforming the S&P 500's 1% increase, indicating strong market confidence in these companies.
- Venezuelan Impact: Following the U.S. military's capture of Venezuelan President Maduro on January 3, investors believe major oil companies will gain access to Venezuela's 19.4 billion barrels of oil reserves, driving up oil stock prices.
- Investment Risks: While there are potential opportunities in Venezuelan oil fields, the country's oil industry is in disrepair, and rebuilding it will be costly and time-consuming, leading analysts to recommend a wait-and-see approach rather than investing blindly amid low oil prices.
Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for XOM is 132.17 USD with a low forecast of 114.00 USD and a high forecast of 158.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 136.830
Low
114.00
Averages
132.17
High
158.00
Current: 136.830
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.
