Oil maintained three-day highs after the OPEC+ alliance agreed to the biggest cut in black gold production since 2020.
Oil market
WTI (West Texas Intermediate) is trading near $87.5 a barrel after around 10% gains in the last three trading sessions. OPEC+, or OPEC and allied countries, decided to cut oil production by 2 million barrels per day at their last meeting. The decision was confirmed today in Vienna.
Goldman Sachs raised its forecast for the price of Brent Crude for the fourth quarter to $110 per barrel after OPEC+ reported that the production cut could prompt the International Energy Agency to release reserves. Morgan Stanley took a similar view, telling investors that the cartel's decision would accelerate the Brent oil price's path to $100 in the short term.
The end of the fuel market correction? What does this mean for Exxon Mobil and other players?
Investors seem to see great potential for Oil & Gas companies to increase their earnings, pushing up the share price of these companies in recent sessions. This is especially true for US companies, which could gain more than European concerns mainly due to the already severely depleted fuel reserve in the US and the need to reduce its outflows.
Exxon Mobil, Chevron and Marathon Petroleum have gained 13.4%, 10.2%, and 8.3% over the past three sessions. The biggest gainer is Exxon Mobil (XOM) with a heavily consolidated production chain that allows it to almost fully benefit from high crude prices.
Exxon Mobil share price, daily candles
Source: Conotoxia MT5
According to MarketScreener data, out of the 30 recommendations issued for XOM, from which only 2 suggest declines in the company's share price. The average target price is $104.55, which could indicate a 5.5 % upside for the share price, given the last close price. Exxon Mobil's share price is losing 0.6 % before the opening.
Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.