Price Correlation of Different Energy Streams and the Fed Stance
(Continued from Prior Part)
Moving averages
After the last rate hike in December 2015, ExxonMobil (XOM) was trading flat compared to the downside movement in upstream and midstream counters. On the other hand, XOM’s price performance is directly correlated to crude oil prices, and the stock started to plunge after the geopolitical tension heightened between Iran and Saudi Arabia. XOM is close to the psychological support level of $70.
As of the closing on January 27, 2016, US-based (SPY) integrated oil and gas companies ExxonMobil (XOM), Chevron (CVX), and Occidental Petroleum (OXY) are trading at an average of 4.9% below their respective 100-day moving averages. ExxonMobil is 3.4% below its 100-day moving average, and Chevron and Occidental Petroleum are trading 3.7% and 7.7%, respectively, below their moving averages. The United States Oil Fund (USO) is trading 28.9% below its 100-day moving average.
On average, these three integrated oil and gas companies are trading 1% below their respective 20-day moving averages. ExxonMobil is trading 1.3% below its 20-day moving average, and Chevron and Occidental Petroleum are trading 1.3% under and at par, respectively, to their 20-day moving averages.
Wall Street analysts’ consensus estimates
Wall Street analysts’ consensus estimates suggest an 11.7% upside for these three integrated energy companies. Over the next 12 months, ExxonMobil and Chevron could see rises of 7% and 14%, respectively, and Occidental Petroleum could see a 15% rise. The table above shows the moving averages and analysts’ estimates for these integrated oil and gas companies.
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