Oil prices are falling. Will your oil stocks follow suit?

Investors May Benefit From Falling Oil Prices At Bowsers, But It Could Affect Their Portfolio As Well

The US benchmark for oil prices has been falling since early November, but prices have fallen even lower amid concerns of another global lockdown due to the new variant of the Omicron coronavirus.

West Texas Intermediate crude prices, a global oil benchmark, hit a low of US $ 62.80 on Thursday morning, a price not seen since late August.

Despite the drop in oil prices, Americans are still paying at the pump. Gas prices have increased by almost 70% in the past 18 months. The national average for a gallon of gasoline was US $ 3.38 as of November 29, 2021, according to data from the United States Energy Information Administration (EIA). That’s against US $ 2.10 last year.

While the recent drop in oil prices has yet to be seen at the pump, the same is not true of oil inventories. Most have slipped in recent times.

Main oil stocks affected by Omicron fears

Here’s how some of the biggest oil stocks are doing as the country faces Omicron.

ExxonMobil Corp (XOM)

The Texas-based oil company’s stock prices opened nearly 6% lower on Black Friday from its previous session, coinciding with the World Trade Organization’s designation that day of Omicron as a worrying variant. .

ExxonMobil Corp shares edged up to US $ 63.14 on Monday and closed at US $ 4.79 below the 52-week high of US $ 66.38 reached earlier in November.

Like much of the market, ExxonMobil stock fell further on Wednesday as the first Omicron case was identified in the United States. Shares were up 3% by noon on Thursday. In total, they are down 4% last month.

Chevron Corporation (CVX)

Chevron Corporation opened 3.28% lower than last Friday and recorded only modest gains during the day, closing at US $ 114.51.

The stock continued its slow rise on Monday and closed at US $ 3.23 below its 52-week high of US $ 118.08, which it reached in mid-November after UBS upgraded Chevron Corporation to ‘buy’.

The oil company was also hit during Wednesday’s trading session following news of Omicron’s arrival in the United States. The stock fell 2.48% and closed at US $ 112.10 per share.

Shares were up 2% by noon on Thursday. In total, they are up 1.8% last month.

ConocoPhillips (COP)

ConocoPhillips started the Black Friday trading day shortened by almost 6% from its previous session close.

The Texas-based oil company followed a similar trend on Monday, opening up 2.8% before settling at a share price of US $ 72.15 at the close. The stock closed US $ 5.83 below its 52-week high of US $ 77.98 on Monday.

ConocoPhillips shares fell 4% on Wednesday on news of Omicron’s arrival in the United States, hitting a two-month low at US $ 69.15.

ConocoPhillips stock was trading around US $ 71.65 on Thursday afternoon, down 2% in one month.

Royal Dutch Shell PLC (RDS.A)

Shares of the Netherlands-based oil and gas company opened US $ 2.47 lower last Friday and hit a two-month low at US $ 41.46 before closing the day with minimal gains.

The stock continued its uptrend on Monday, opening 2.71% higher before ending the day down US $ 0.76 per share.

After falling 3.32% in Wednesday’s trading session, shares of Royal Dutch Shell rose on the company’s announcement this morning of a $ 1.5 billion share buyback.

Shares were up 2% by noon on Thursday. They are down about 2% over the past month.

BP PLC (BP)

Shares of the UK oil and gas company opened lower US $ 1.88 last Friday and made only modest gains at the end of the day.

The stock hit a two-month low of US $ 25.46 during Friday’s trading session and closed at US $ 4.33 below its 52-week high of US $ 30.29, which it reached at the end of October.

After falling 3.31% in Wednesday’s trading session, shares of BP PLC are on the rise. BP PLC shares gained 5% on Thursday afternoon. Overall, it’s mostly flat for the month.

Time to sell?

Oil stocks tend to move in line with crude oil prices, and falling oil prices can directly affect the amount oil companies make per barrel produced.

They are also known to be volatile, and most of them have had good descents all year round. But unless you are an active trader or looking to take a profit, you might not want to give up a long term stock due to a short term drop in oil prices.

That said, the exchange-traded fund (XOP) SPDR S&P Oil & Gas Exploration & Production has fallen almost 50% in five years.

Three of those stocks are down in double digits and Chevron is showing a slight loss. (ConocoPhillips defies the trend with a 40% gain.)

During the same period, alternative energy stocks like Solaredge Technologies (SEDG) and Nextera Energy (NEE) are on the rise, as is electric vehicle giant Tesla (TSLA). This could be a sign that many investors are looking for alternatives to oil stocks – and you might want to, too.

Disclaimer: This information should not be construed as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be taken as investment advice or interpreted as providing recommendations of any kind. Trading in futures, stocks, ETFs and options carries a substantial risk of loss and is therefore not suitable for all investors. Trading CFDs and currencies with leverage comes with a higher risk of losing money quickly. Past performance is no guarantee of future results. Be aware of your own situation and get your own advice before making any transactions.


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Felix J. Dixon