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1 month ago
ExxonMobil Secures Largest U.S. Offshore CO2 Storage Site
By: Zacks Investment Research | October 14, 2024
Exxon Mobil Corporation XOM has secured the largest offshore carbon dioxide (CO2) storage lease in the United States with the Texas General Land Office, marking a significant step in carbon capture and storage (CCS). The site covers more than 271,000 acres in Texas state waters, solidifying ExxonMobil’s leadership in the CCS industry.
XOM Expands CO2 Storage in the U.S. Gulf Coast
This new offshore site complements ExxonMobil’s existing onshore CO2 storage portfolio and boosts the U.S. Gulf Coast’s status as a global hub for carbon capture. The company is already operating the largest CO2 pipeline network in the United States, positioning it to offer a full-service solution for carbon capture, transport and storage.
Dan Ammann, president of ExxonMobil Low Carbon Solutions, noted that with a growing base of customers ready to implement CCS, ExxonMobil is positioned to drive significant emission reductions along the Gulf Coast. The company’s comprehensive approach, which includes capture, transportation and storage, reinforces its leadership in the industry.
XOM’s Lease Benefits Texas Education
The agreement's terms will directly support the Texas Permanent School Fund, contributing to the state’s education system. Texas Land Commissioner Dawn Buckingham expressed enthusiasm about the partnership, emphasizing its benefits of supporting educational funding and advancing energy solutions. She pointed out that the revenues from the lease will directly benefit the state and Texas schoolchildren.
XOM’s Role in Net-Zero Goals
ExxonMobil’s new offshore acreage provides crucial space for storing CO2 emissions, helping society work toward achieving net-zero goals. The Gulf of Mexico, with its vast potential for storage, is a key player in this effort, and ExxonMobil is well-positioned to leverage its infrastructure to support carbon reduction strategies on a large scale.
With this lease, XOM continues advancing its vision of a low-carbon future while significantly contributing to the local community and education system.
XOM’s Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
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2 months ago
3 Oil Stocks to Watch Amid Middle East Conflict
By: Schaeffer's Investment Research | October 2, 2024
• Iran yesterday launched a ballistic missile attack on Israel
• Israel's air strikes recently killed Hezbollah leaders in Lebanon
Oil stocks are back in focus, but not because of the U.S. presidential election. Rising tension in the Middle East put black gold back in the spotlight, after Iran's ballistic missile attack on Israel. This follows Israel's air strikes, which killed several Hezbollah leaders in Lebanon, where militants and Israeli troops are currently fighting.
The conflict could disrupt crude production and distribution, thus lowering supplies and hiking prices. Below, let's dig into how sector giants Marathon Oil Corp (NYSE:MRO), Occidental Petroleum Corp (NYSE:OXY), and Exxon Mobil Corp (NYSE:XOM) are faring amid the escalation.
MRO was last seen trading near breakeven at $27.62, losing steam after rallying from a pullback to familiar support at the $25 level, which contained losses in early September. Shares now sport a 27.6% year-to-date lead, and added 7.9% in the past 12 months.
OXY is down 1% to trade at $52.74 at last glance. The shares recently bounced off their lowest level since 2022, but carry a 12.1% deficit for 2024, and a 15.2% year-over-year loss.
XOM is within striking distance of its April 12, year-to-date high of $123.75, last seen up 0.5% at $120.47. The equity also conquered resistance at the $120 level, which capped several rallies since that peak. Exxon Mobil has tacked on 17.7% so far this year.
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3 months ago
Exxon forecasts 2050 oil demand to match today's, 25% above BP estimate
By: Reuters | August 27, 2024
HOUSTON, Aug 26 (Reuters) - Exxon Mobil (XOM.N), opens new tab said on Monday it expects crude demand to stay above 100 million barrels per day (bpd) through 2050, similar to today's levels, a forecast 25% higher than top European rival BP (BP.L), opens new tab.
The stronger demand, opens new tab projected by the largest U.S. oil company in its latest global oil outlook underpins Exxon's production growth plans, the most ambitious among Western oil majors. It did not have a 2050 demand figure in its previous outlook released in 2023, opens new tab.
The company also painted a more somber view on global carbon emissions reductions than BP. Advancements in technology will allow for emissions reductions after 2029, compared to the middle of this decade according to BP.
Exxon plans to pump 4.3 million barrels of oil and gas per day this year, 30% more than U.S. top rival Chevron's (CVX.N), opens new tab current output. BP is cutting production to about 2 million barrels per day by 2030.
"Oil and gas demand have a very, very long runway and will continue to grow over the next few years," Exxon Economics, Energy and Strategic Planning Director Chris Birdsall told Reuters.
Exxon estimates electric vehicles will not significantly alter long-term global oil demand, as the world's population is expected to increase from 8 billion today to nearly 10 billion in 2050, adding to demand for energy.
If every new car sold in the world in 2035 were electric, crude oil demand would still be 85 million bpd, the same it was in 2010, it said. BP projects oil consumption will peak in 2025 and decline to 75 million bpd in 2050.
The estimates are more than triple the 24 million bpd of crude the International Energy Agency (IEA) says would allow the world to reach net-zero emissions by 2050.
Exxon projects 67% of the global energy mix in 2050 will be supplied by oil, natural gas and coal, down from 68% last year.
The company said more investments in oil than are currently anticipated will be necessary as the world transitions to unconventional resources. Wells in these geological formations, such as U.S. shale, have a shorter production lifespan and exhibit a more pronounced natural decline, it said.
Exxon projects that without new investments, output would decrease by about 15% per year, a steeper decline compared to IEA's 2018 estimates of about 8% per year.
This rate of decline could cause oil prices to quintuple, with global supply plummeting to 30 million bpd as early as 2030, according to Birdsall.
"Global oil and natural gas supplies would virtually disappear without continued investments," Birdsall said. "The biggest reason for the change is the shift to more short-cycle unconventional assets."
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4 months ago
NY Crude Oil Futures »» Weekly Summary Analysis
By: Marty Armstrong | August 3, 2024
NY Crude Oil Futures closed today at 7352 and is trading up about 2.60% for the year from last year's settlement of 7165. Caution is required for this market is starting to suggest it could now decline on the MONTHLY level. Factually, this market has been rising for this month going into August reflecting that this has been only still, a bullish reactionary trend. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 7297 while it's even trading beneath last month's low of 7459.
Up to now, we still have only a 1 month reaction rally from the low established during June. We must exceed the 3 month mark in order to imply that a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last year. The last Yearly Reversal to be elected was a Bullish at the close of 2023.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Nevertheless, it closed last year on the weak side down from 2022. Pay attention to the Monthly level for any serious change in long-term trend ahead.
The perspective using the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains in a bearish position at this time with the overhead resistance beginning at 7459.
On the weekly level, the last important high was established the week of July 1st at 8452, which was up 4 weeks from the low made back during the week of June 3rd. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed beneath that low which was 7604. This was a very bearish technical indicator warning that we have a shift in the immediate trend. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 8452 made 4 weeks ago. Still, this market is within our trading envelope which spans between 6563 and 9177.
Looking at this from a broader perspective, this last rally into the week of July 1st reaching 8452 failed to exceed the previous high of 8767 made back during the week of April 8th. That rally amounted to only twelve weeks. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 8 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2023. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.
Looking at the longer-term monthly level, we did see that the market made a high in April at 8767. After a four month rally from the previous low of 8070, it made last high in April. Since this last high, the market has corrected for four months. However, this market has held important support last month. So far here in August, this market has held above last month's low of 7459 reaching 7459.
Some caution is necessary since the last high 8767 was important given we did obtain two sell signals from that event established during April. That high was still lower than the previous high established at 9503 back during September 2023. Critical support still underlies this market at 6760 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak trading beneath last month's low.
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4 months ago
2 Oil Stocks to Watch Amid Presidential Race, Earnings
By: Schaeffer's Investment Research | July 29, 2024
• Chevron and Exxon Mobil will report earnings on Friday, Aug. 2
• Wall Street is weighing how a new president will impact the energy sector
The presidential race is heating up, with Vice President Kamala Harris now the likely Democratic nominee against former President Donald Trump. Investors have been weighing the implications either leadership may have on the energy sector, especially as both Chevron Corp (NYSE:CVX) and Exxon Mobil Corp (NYSE:XOM) prepare to report second-quarter earnings before the open on Friday, Aug. 2.
Chevron stock was last seen down 1.7% to trade at $155.25. Shares ran into resistance at the $164 level earlier this month, while the 80-day moving average also emerged as a level of pressure in the subsequent pullback. CVX is today looking snap a three-day win streak, but still sports a slim year-to-date lead.
Exxon Mobil stock is struggling as well, down 1.1% to trade at $116.03 at last check. While the $120 level has capped rallies since April, the 40-day moving average helped shares bounce. XOM appears to be finding new resistance at $118, but is still up 15.9% this year.
CVX has a solid history of post-earnings reactions, but it could go either way for XOM. The former finished five of the last eight next-day sessions higher, while the latter was lower in the last four.
Regardless of direction, Chevron and Exxon Mobil shares averaged 3.3% and 2.2% moves in the past two years, respectively. This time, the options pits are pricing in a bigger-than-usual swings of 3.8% for CVX, and 3.5% for XOM.
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4 months ago
Why Exxon Is the Top Holding in an Energy Transition Fund
By: Barron's | July 10, 2024
Beauty is in the eye of the beholder. So too, at times, is sustainability.
Big energy companies have long been seen as antithetical to the transition away from fossil fuels toward more green energy solutions. That's a justifiable position, given these players for years actively worked against climate change action and suppressed information about the issue, prioritizing their own carbon-emitting business model over science and popular support for renewable energy.
However, even if aggressive action were taken to move the world toward more options, like wind and solar, some oil and natural gas would remain in use; in addition, making the switch is a costly one. In that regard, some investors may see big oil as a necessary partner, even if they remain wary of "green-washing" campaigns to try to rehabilitate its image.
That backdrop makes it easier to understand why Exxon Mobil is the largest position in the Hennessy Energy Transition Fund, which also counts ConocoPhillips and Chevron among its top 10 holdings.
Barron's recently spoke with one of its portfolio managers, Ben Cook, to discuss how companies like Exxon fit with the fund's mandate, and he notes that Exxon "is pursuing practical pathways to transition."
That includes things like carbon capture and storage and lithium extraction for batteries. Cook notes that the company's priorities have remained firmer than others: "Unlike some of its peers that are now reversing course on some renewable endeavors, Exxon is taking a reasonable approach that remains shareholder-focused and should continue providing solid returns during the move to more climate-friendly fuels."
Exxon's balance between shareholder interest and its renewable initiatives speaks to how the fund seeks to identify companies that can handle both, given that some companies that may lead the energy transition and be truly revolutionary aren't always the best bet from an investor standpoint.
Likewise, the Exxon's deep pockets mean that its renewable projects aren't beholden to the political situation, be that tariffs or tax credits, which can often hamper smaller operators.
Cook highlights the company's ongoing, long-term commitment to lithium, which management has spoken publicly about, even in the face of lithium price weakness — a headwind to pure play companies in the arena, like Albemarle. "Exxon's integrated business model provides stability during times of price volatility as financial results of varying/different business units tend to offset one another, ultimately providing for consistency in financial results through the cycle."
He argues that the shares, which change hands for about 12 times forward earnings, are attractive, and that the company has the wherewithal to continue pursuing renewables from multiple angles (rather than focusing on just solar, for example, as some smaller companies do). "Exxon's total capital expenditures in 2023 were around $23 billion," he says, so committing a sum like $100 million to a green energy project is like "a rounding error" for the company.
ESG, which stands for environmental, social, and governance, has grown in popularity in the investing community, but there aren't any hard and fast criteria for what makes a company fall into this category. For example, one ESG-focused fund may include a company like Philip Morris International, given that it's a leader in reduced-risk tobacco products, while another may exclude it because it still sells traditional cigarettes.
Given the latitude with which investors and funds can judge ESG, it's easier to see how Exxon could be considered under this umbrella.
Cook says that focus on ESG could help motivate Exxon to continue to fund greener products, as the company clearly "has an incentive to broaden the company's appeal with investors that place emphasis on clean energy initiatives. While selling pressure associated with mandates to shed fossil fuel exposure seem to have reached a peak, attracting new investor capital obviously remains a key focus for any integrated oil company and Exxon's pursuit of low carbon solutions can certainly be a means to that end."
Of course, others disagree; blood may be boiling along with temperatures as much of the country struggles with historic heat, which scientists attribute to climate change. Still, baby steps may be better than no steps at all.
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5 months ago
Where Fundamentals Meet Technicals: Exxon Mobil (XOM)
By: Lyn Alden Schwartzer | June 28, 2024
This issue of Where Fundamentals Meet Technicals re-iterates my bullish view on energy names.
As I sit here typing this piece in Cairo, I can unfortunately report that Egypt faces daily rolling power outages, which are caused primarily by natural gas shortages. The grid operators spare my neighborhood from them, but most neighborhoods throughout Egypt are facing recurring scheduled power outages as the limited power generators can only power so many of them at once.
Egypt produces lots of gas domestically and also imports gas from Israel, but the total amount is increasingly insufficient for Egypt in the summer months when air conditioning demand is at its highest. They are turning to LNG imports, but there is limited capacity for that in the near term.
This anecdote is one of many, since it’s a common occurrence throughout the developing world. But it underscores how important energy is. There is vast demand for energy throughout emerging markets, and in the long run I expect that their total usage will go up considerably.
In particular, when the dollar index puts in more of a local top, and the Fed begins a rate-cutting cycle, it should alleviate the USD-denominated debt burdens of a number of emerging and frontier markets, and lighten up their liquidity situation enough to active more energy demand.
Exxon Mobil (XOM) and other large integrated energy majors have been my preferred way to play the energy sector. They are inexpensive, they are very profitable at current oil prices, and they have strong balance sheets.
I view the 2014-2020 period as a major bottom for the oil market. Zero interest rates and the subsequent willingness of investors to fund unprofitable companies helped accelerate the shale revolution, and all of that new oil disrupted global supply/demand balances for oil. But now companies need to be more profitable and self-financing, and the global supply/demand situation for oil incorporates this new shale oil.
Going forward, I expect oil to be flat-to-up, and I expect to see a lot of profitability from the oil sector. In other words, I think there’s a pretty strong floor under oil companies. With their ability to spin off reliable dividends from free cash flows and fortress balance sheets, at these valuations I view them to be like volatile bonds with built-in inflation protection and an option for much higher potential.
Zac sees a potential move from $115 to $165 over the next year. I don’t have any firm view on that, but the way I see the risk/reward situation is that I think the bear case is rather stagnant and rangebound, and the bull case includes some rather large price appreciations of this scale.
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