Oil Giant Breaks Out On Russia’s 500,000-Barrel Threat

Exxon Mobil (XOM) stock broke out Friday after Russia announced it would cut its oil output by 500,000 barrels a day next month, sending crude prices higher.


On Friday, a statement from Russia’s Deputy Prime Minister Alexander Novak said the country plans to cut March production by 500,000 barrels per day in response to the European Union’s ban on seaborne imports and price caps on oil products from Russia. Energy stocks moved higher as oil prices advanced on the news, with Exxon Mobil stock retaking a buy point.

U.S. crude futures briefly jumped around 3% to above $80 per barrel, before settling to about a 1.5% increase Friday. U.S. oil prices are now up almost 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 per barrel.

Oil prices also received a boost from China inflation data showed consumer prices rising in January, a sign that the country’s reopening economy is gaining strength. In addition, on Monday, top world oil exporter Saudi Arabia raised its crude prices for Asian markets for the first time in six months.

The International Energy Agency’s (IEA) Executive Director Fatih Birol has said China’s economy could be poised for a stronger-than-anticipated rebound that will boost demand for crude.

The IEA also produced an optimistic oil demand forecast estimating that China will boost 2023 global oil demand to record highs. Estimates from IEA forecast China’s reopening will drive global oil demand to 101.7 million barrels per day (bpd) in 2023, up by 1.9 million bpd from 2022.

Exxon Mobil Stock

Exxon Mobil stock advanced 4% to 119.10 during market trade Friday, moving past a 114.76 buy point. XOM shares formed a flat base with that buy point, according to MarketSmith. Exxon Mobil stock had been tracking with the S&P 500, but has now forged ahead.

Exxon Mobil posted mixed fourth-quarter financial results in late January, beating earnings estimates but missing revenue views. However, the energy giant, fueled by a “favorable market,” reported record profits in 2022 and its highest annual revenue since 2013.

Exxon Mobil reported EPS growing 66% to $3.40 while revenue shot up 12% to $95.43 billion in Q4.

In 2022, Exxon Mobil earnings skyrocketed 160% to $14.06 per share. Sales edged up 45% to $413.68 billion. Exxon Mobil has averaged a 185% EPS growth rate over the last four quarters.

This was fueled by soaring oil, gasoline and natural gas prices during 2022 as the U.S. economy recovered and Russia invaded Ukraine in February.

Exxon Mobil stock ranks fifth in the Oil & Gas-Integrated industry group. XOM shares have an 88 Composite Rating out of 99. The stock has a 91 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating is 77.

Please follow Kit Norton on Twitter @KitNorton for more coverage.


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