Oil companies at risk. Will Exxon Mobil and Chevron keep their fat dividend?
The world oil market is bursting at the seams. Too much is being extracted, supplies are running out and this is squeezing oil company profits. Will the big oil companies, whose fortunes and dividends depend on the price of oil, cope?
I'll tell you right from the start - they will. Such giant companies are in a strong enough financial position to cope with such a fluctuation. And there is a second factor - a reversal is likely to come soon, which will in turn help them. Why?
"At the moment, the world oil market is probably slightly oversupplied. But sometime late in the second or early in the third quarter it will flip dramatically," said analyst Rob Thummel.
"When the oil market is undersupplied, there is usually a positive price reaction. So we would expect oil prices to rise a bit," Thummel said.
Oil prices have been under pressure recently, despite the production cuts announced by OPEC+ last month.
OPEC+ is an organization that brings together the world's major…
Oil is not going anywhere for a long time. Great post Mart.
The Worldwide Economy crisis destabilizes everything even stable companies
Already oil was almost at zero in covid and hey they are still here :D this sector can withstand almost anything just have to have bought well and not stress about the price where it is but think where it will be in a few years :)
I think this sector can withstand anything, so I always buy more for a good price. I'm not worried about the long-term outlook at all
As you say in the introduction, I'm not worried about this sector either, it's true that there are fluctuations, maybe cycles, I haven't mapped them out exactly, but certainly less demand won't destroy such strong companies and oil and gas is a commodity I don't think humanity will be able to live without. Even if we have electric cars, oil will still be needed, I believe, at least in our lifetimes. Otherwise, I like $XOM but exactly, you probably can't go wrong by buying both. 😊
You can never go wrong with these companies. But the problem may of course be the right price