Wednesday, April 20, 2011

Chevron (CVX) (XOM) (BP) (COP) Jump on Low Oil Inventories

Shares of Chevron (NYSE:CVX), ExxonMobil (NYSE:XOM), BP (NYSE:BP) and ConocoPhillips (NYSE:COP) were all jumping today on news Oil inventories fell by 2.3 million barrels last week, according to the Energy Information Administration.

Expectations were oil inventories were going to increase by 1.6 million barrels.

Consequently the price of crude oil surged over the $110 a barrel mark again. Nymex oil for June delivery increased 2.1 percent to $110.54 as of 11:25 AM EDT.

Looking forward to the earnings reports of big oil companies next week, Key Private Bank analyst Steven Hoedt say he likes Hess Corporation (NYSE:HES), “which stand to benefit disproportionately from wide crack spreads, which means robust refining margins, leading to the potential for earnings surprises.”

Also noted was the Alberta tar sands play, where Hoedt noted, “With spare capacity tight, price needs to remain persistently high over an extended period of time for the message to be sent that capital needs to be committed to developing productive capacity. We continue to believe that one of the prime beneficiaries of this growing investment will be the oil sands of Alberta, where many are waking up to the fact that the region has 50-75 years of reserves in the ground. While incredibly costly to bring on line, once in production, a company has possession of long-duration reserves and there are very few places in the world today where it is possible to find even medium-duration oil reserves where there is also political security. In other words, the oil sands are a strategic asset that is currently being undervalued by the market, in our view. Prime beneficiaries are Suncor Energy (NYSE:SU), Cenovus Energy (NYSE:CVE), and Canadian Natural Resources (NYSE:CNQ), in our view.”

BP was trading at $45.87, gaining $1.19, or 2.66 percent, as of 1:59 PM EDT. Exxon was trading at $85.49, up $1.69, or 2.02 percent. ConocoPhillips was at $ 79.96, rising $1.81, or 2.32 percent. Chevron was trading at $107.87, increasing $2.47, or 2.34 percent.

No comments: