On Wednesday, Exxon Mobil stock soared as the company indicated that rising natural gas prices would bolster already robust projections for the third quarter. The energy giant forecasts that it will not be able to equal its record earnings from the second quarter, despite the sharp growth predictions that it has provided. This is due to the decline in oil prices, as well as the decline in profits from the refining and chemical segments.
According to federal papers released late on Tuesday night, Exxon Mobil Corp (NYSE:XOM) stated that its operating profit for the third quarter might end up being somewhere near $11 billion. That would significantly increase from the $6.7 billion operating profit one year earlier. Still, a significant decrease from the record $17.6 billion in operating profit recorded in the second quarter.
The profits projection for the oil and gas giant’s third quarter focuses mainly on the dynamics of the industry, seasonal trends, and planned operations. According to Exxon’s statement, other margin-related factors, like swings in foreign currency exchange rates, were not considered.
The results preview, on the other hand, indicated that Exxon’s natural gas division performed well during the third quarter due to increased prices. The price of natural gas futures in the United States reached a 14-year high in August, surpassing $10 per million British thermal units (mmBtu). Exxon anticipates that the continued strength of natural gas prices would result in a segment benefit of $1.8 billion to $2.2 billion in the third quarter.
Meanwhile, it is anticipated that the price decline for oil and other liquids, such as ethane and propane, will result in a loss of between $1.4 billion and $1.8 billion in those markets. Compared to the previous quarter, this quarter’s margins for refining and chemicals have been lower. Exxon Mobil stock anticipates a loss of between $2.7 billion and $2.9 billion due to shifts in the industry margins for energy goods.
On October 28th, Exxon Mobil stock is forecast to release the company’s earnings report for the third quarter. A boost in earnings of 123% is anticipated, which would translate to $3.52 per share. According to FactSet, analysts on Wall Street anticipate an increase in sales of 42 percent to $105.1 billion.
Exxon Mobil Stock Trading
During the trading session on Wednesday, the price of Exxon Mobil stock increased by more than four percentage points, reaching a new all-time high of 99.10 points. Because of this, the Exxon Mobil stock price has increased by approximately 14% so far this week, and it is now solidly trading above its 50-day moving average. According to MarketSmith, the stock is stabilizing, and a purchase point of 105.67 has been assigned. An early entry point has been established at 101.56.
The market position is still considered “in correction,” indicating that investors should continue to construct watchlists and wait for a day that will follow through.
A Composite Rating of 97 has been assigned to Exxon Mobil Stock. It has a Relative Strength Rating of 96, an exclusive IBD Stock Checkup metric that measures the movement of share prices on a scale from 1 to 99. A score of 80 was given for EPS.
Stocks of oil and gas companies such as Schlumberger (SLB), Marathon Oil Corporation (MRO), APA (APA), and Murphy Oil (MUR) increased in value on Wednesday morning following an announcement by OPEC+ that it will reduce oil output by 2 million barrels per day (BPD).
It was the first time since April of 2020 that output had decreased. The purpose of this effort by the cartel was to prop up the price of oil in the face of estimates predicting a decline in economic activity and demand.
Following a day in which they increased by 3%, prices for a barrel of crude oil in the United States rose by 1.5% to 87.80 on Wednesday. On Monday, the price of oil rose by around 5%. This occurs as a result of the fact that crude oil futures saw their fourth monthly loss in a row in September. Following Russia’s invasion of Ukraine in March, oil prices shot through the roof, temporarily topping $130 per barrel for some time.
Despite this, crude oil prices have dropped by more than thirty percent due to concerns about a downturn in the global economy and lower energy demand.
In the meantime, the price of crude oil rose at the beginning of this week. At the same time, contracts for natural gas in the United States traded down approximately 4% on Monday to reach their lowest level since July. On the other hand, the price of natural gas jumped by more than one percent on Wednesday, reaching $6.93 per million British thermal units. This happened after futures prices for natural gas increased by 5.4% on Tuesday.
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