Crude prices are struggling to find their level this week after a historic agreement to cut to global production and ahead of major oil producers announcing first-quarter earnings. As the price war between Saudi Arabia and Russia ends, Exxon, Chevron and ConocoPhillips shares edging up 0.5%, 0.5% and 0.3% in respectively pre-market trading on Thursday.
Brent crude was down 19 cents, or 0.7%, at $27.50 a barrel in morning trading, while West Texas Intermediary was up 7 cents, or 0.4%, at $19.94.
The weekend deal to cut output by 9.7 million barrels per day, or 10% of world output, will begin by the start of next month and extends to the end of June. The move comes as coronavirus stalls global economic activity slashing the demand for oil. Global crude demand has fallen 30% so far this month.
Exxon Mobil is working on plans to cut costs, pending an announcement on whether dividends will be cut for the first time in decades. Investors are awaiting a similar update from Chevron.
Both companies have clean balance sheets with net debt-to-capital ratios of in the 10% to 11% range. Cutting the dividend would discourage investors, especially since Exxon has increased its dividend each year for the last 37 years, and Chevron’s streak is almost as long.
Ahead of the companies’ earnings reports this month, Exxon is “looking to significantly reduce spending” in the near term as it struggles with the fallout from the health emergency and a steep commodity-price decrease. Exxon stock is off about 55% from a 52-week high of $83.38.
Both Exxon and Chevron are expected to slash their 2020 capital spending budgets as they slow the development pace of longer-term projects. Preserving cash has become a key priority during this downturn.
Goldman analysts rate Exxon a sell, and continue with their long-standing preference, shared by many analysts, prefer Chevron over Exxon.
Chevron, ConocoPhillips and Suncor Energy are expected to perform better due to their large caps and strong balance sheets that will allow them to get to the other side of the Opec/demand-driven downcycle in a position of strength, said Goldman analysts.
Trusted & Regulated Stock & CFD Brokers
What we like
- 0% Fees on Stocks
- 5000+ Stocks, ETFs and other Markets
- Accepts Paypal Deposits
Min Deposit
$200
Charge per Trade
Zero Commission on real stocks
64 traders signed up today
Visit Now67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Available Assets
- Total Number of Stocks & Shares5000+
- US Stocks
- German Stocks
- UK Stocks
- European
- ETF Stocks
- IPO
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 Zero Commission
- NASDAQ Zero Commission
- DAX Zero Commission
- Facebook Zero Commission
- Alphabet Zero Commission
- Tesla Zero Commission
- Apple Zero Commission
- Microsoft Zero Commission
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
- Paypall
- Skrill
- Neteller
What we like
- Sign up today and get $5 free
- Fractals Available
- Paypal Available
Min Deposit
$0
Charge per Trade
$1 to $9 PCM
Visit Now
Investing in financial markets carries risk, you have the potential to lose your total investment.
Available Assets
- Total Number of Shares999
- US Stocks
- German Stocks
- UK Stocks
- European Stocks
- EFTs
- IPOs
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 $1 - $9 per month
- NASDAQ $1 - $9 per month
- DAX $1 - $9 per month
- Facebook $1 - $9 per month
- Alphabet $1 - $9 per month
- Telsa $1 - $9 per month
- Apple $1 - $9 per month
- Microsoft $1 - $9 per month
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
Share
Galina Mikova
