| ExxonMobil Slips to 52-Week Low; Crude Prices Play Foul - Analyst Blog | |
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Shares of ExxonMobil Corporation XOM touched a 52-week low of $81.49 on Jul 7. The fall came after West Texas Intermediate (WTI) crude slid almost 9% and is now hovering around the $52 a-barrel mark. This is the lowest level touched by oil since mid-April this year.
What Led to the Share Price Decline?
It has been an over-supplied oil market especially in the face of lackluster global demand. Plentiful supply of shale oil owing to a shale revolution in the U.S has been dragging the WTI crude prices since last August.
On top of this, Iran is presently negotiating a nuclear deal with the global superpowers. If the agreement goes through, all sanctions against the country will be lifted and Iran will work toward stepping up crude export. This would spell more trouble as Iran already possesses the world’s fourth largest oil reserve. The latest agreement will only pump more oil into an already oversupplied market. In fact, an Iranian official recently stated that the country is willing to double crude exports after obtaining the necessary go-aheads.
These dealt a blow to ExxonMobil which has extensive upstream operations. The exploration and production activities especially in the weak crude pricing scenario are not profitable. Hence, investors reacted negatively and the share price of the company fell.
The weak crude pricing environment this year also affected ExxonMobil’s first-quarter results. The company’s Upstream operations reported quarterly earnings of $2.9 billion, down $4.9 billion year over year. The decrease stemmed from lower liquids and gas realizations. Higher volumes partially offset the downside.
Zacks Rank
ExxonMobil currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector are Transmontaigne Partners L.P. TLP, EQT Midstream Partners L.P. EQM and LRR Energy, L.P. LRE. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Exxon Mobil is a and oil producing company based in United states of america. Exxon Mobil is listed in Germany, in United Kingdom and in United States of America. Its market capitalisation is US$ 499.8 billions as of today (€ 467.1 billions). Its stock quote reached its lowest recent point on March 14, 1997 at US$ 100.12, and its highest recent level on April 26, 2024 at US$ 117.96. Exxon Mobil has 4 237 270 016 shares outstanding. |