Why Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) Stocks Are Trading Higher Today
Oil stocks haven’t been the best performers this year, but they’ve been surprisingly resilient. The economy is on shaky ground with plenty of uncertainty. This is usually the time when oil and gas stocks go down in anticipation of a broader slump that could eat into their profits. Of course, these stocks have trended down […] The post Why Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) Stocks Are Trading Higher Today appeared first on 24/7 Wall St..
Oil stocks haven’t been the best performers this year, but they’ve been surprisingly resilient. The economy is on shaky ground with plenty of uncertainty. This is usually the time when oil and gas stocks go down in anticipation of a broader slump that could eat into their profits. Of course, these stocks have trended down along with the rest of the market, but not to the degree of tech stocks.
What’s even more unusual is that ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) are trending up today despite the broader market volatility. What’s causing these stocks to climb despite tariff and recession fears? Let’s take a look.
Key Points
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ExxonMobil and Chevron are rallying today, and this is quite unusual.
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Oil and gas stocks generally underperform during market uncertainty.
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Both stocks are outperforming due to the rise of crude oil futures. Here’s why that’s the case.
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What’s Causing XOM Stock and CVX Stock to Rally Higher?
Both stocks are rallying as WTI crude surges due to geopolitical tensions and seasonal demand expectations. WTI Crude Oil futures are up by 2.3% today due to the Trump administration issuing new sanctions aimed at Chinese importers of Iranian oil. This is a part of his maximum pressure campaign.
Earlier this month, the FTC hinted at reversing acquisition-related board restrictions on Chevron and Exxon.
Investors have also rotated out of tech stocks and have moved into energy stocks due to their cash flow. Oil and gas prices have held on surprisingly well and are still above pre-COVID levels.
Not only that, the current administration is very friendly to oil and gas companies. Chevron is nearing its 2025 target of 1 million barrels of oil equivalent per day (BOE/d) in the Permian, and ExxonMobil boosted Permian output to 1.185 million BOE/d in 2024 after acquiring Pioneer Natural Resources. It aims at 2.3 million BOE/d by 2030. There is record oil production in the U.S. now.
Should You Buy XOM and CVX Stock?
This mostly depends on what you think about the broader economy. Oil and gas stocks are great bets for when the economy is booming. Plenty of energy demand is generated during an energy boom, especially if you combine that with the record oil production we are seeing now.
At the same time, if you think that a recession or a downturn of some kind is around the corner due to the tariffs shocks and the consequent downturn, I’d I wouldn’t touch XOM and CVX stock with a ten-foot pole.
Perhaps AI could still cause a boom in energy demand, and if the economy keeps on performing regardless of the shocks, these oil stocks might also do well. No one can tell for sure.
If you are a bull on the macros, I’d suggest being more aggressive and deploying that capital in the dozens of buying opportunities that have opened up instead of XOM or CVX. If you’re a bear, park your money in more defensive picks.
The post Why Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) Stocks Are Trading Higher Today appeared first on 24/7 Wall St..
