I think COP is going to see some downward pressure this week. Oil has dropped below $86 and support appears at @$82. In addition, production at COP is declining about 3 percent per year and the average price of oil dropped a $1 last quarter versus the previous quarter. More importantly, natural gas continues to under perform and volumes are expected to be light (Idle capacity). Add FX (foreign Exchange) and Isaac and I think the quarter will disappoint a little bit. If we get a correction to $54 I would start buying the stock. At $52 I think you can very constructive on the name. You need to be patient until we see oil bounce at $82.
I guess my question is what makes COP so much different than CVX? CVX warned a couple days ago driving the stock from $118 to $109. CVX still has refinery capacity while COP divested PSX. Refinery margins are pretty good right now and CVX had to warn despite good margin in that area. Why are people bullish COP after the information we received from CVX?
Let's see, because oil was $90+/barrel for the entire third quarter? Because the dividend yield is at 4.7%? Earnings are the real driver of a stock price so you'll have to wait for oil to drop significantly for a length of time long enough to screw the fourth quarter earnings and then wait until the earnings are reported to buy at $54.