exxonmobil (XOM) shares exploded on Friday after Russia announced it would cut its oil production by 500,000 barrels a day next month, which would drive up crude prices.
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On Friday, a statement by Russia’s Deputy Prime Minister Alexander Novak said the country plans to cut March production by 500,000 barrels a day in response to the European Union’s ban on seaborne imports and peak prices for oil products from Russia. Energy stocks rose as oil prices moved higher on the news, and Exxon Mobil shares recouped a buy point.
US crude futures briefly rose around 3% to above $80 a barrel, before settling at around 2.3% higher on Friday. US oil prices are now up nearly 9% on the week, setting the stage for oil’s strongest advance since early October. Brent crude futures also advanced more than 2% to around $87 a barrel.
Oil prices also got a boost from inflation data from China that showed consumer prices rose in January, a sign that the reopening country’s economy is gathering strength. Also, on Monday, the world’s top oil exporter, Saudi Arabia, raised crude prices for Asian markets for the first time in six months.
International Energy Agency (IEA) executive director Fatih Birol said China’s economy may be poised for a stronger-than-anticipated rebound that will boost demand for crude oil.
The IEA also produced an upbeat oil demand forecast that estimates China will drive global oil demand in 2023 to record levels. IEA estimates forecast that China’s reopening will boost global oil demand to 101.7 million barrels per day (bpd) in 2023, up 1.9 million bpd from 2022.
ExxonMobil Stock
Exxon Mobil shares rose 4.3% to 119.22 in Friday trade, clearing a buy point of 114.76. XOM shares formed a flat bottom at that buy point, according to MarketSmith. Exxon Mobil shares had been keeping pace with the S&P 500, but have now moved on.
Exxon Mobil posted mixed fourth-quarter financial results at the end of January, beating earnings estimates but missing revenue prospects. However, the energy giant, buoyed by a “favorable market”, reported record profits in 2022 and its highest annual revenue since 2013.
Exxon Mobil reported that EPS grew 66% to $3.40, while revenue soared 12% to $95.43 billion in the fourth quarter.
In 2022, Exxon Mobil’s earnings skyrocketed 160% to $14.06 per share. Sales increased 45% to $413.68 billion. Exxon Mobil has averaged an EPS growth rate of 185% over the past four quarters.
This was fueled by skyrocketing prices for oil, gasoline and natural gas during 2022 as the US economy recovered and Russia invaded Ukraine in February.
Exxon Mobil shares rank fifth in the integrated oil and gas industry group. XOM shares have a composite rating of 88 out of 99. The stock has a Relative Strength Rating of 91, an exclusive IBD Stock Checkup indicator for stock price movement. The EPS rating is 77.
Follow Kit Norton on Twitter @KitNorton for more coverage.
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