Oil is hitting a 2 1/2-year high. Yet Exxon Mobil is down this month.
The price of oil has skyrocketed to nearly $110 per barrel in the past two months. That’s an increase of 14%. But investors may be surprised that one of the biggest names in oil, Exxon Mobil, has actually been down during this period.
Syria is a big factor as to why oil is up right now. As that country’s civil war rages on, the world expects some amount of US and global action after the Assad regime was accused of using chemical weapons against its own people. However, that may not have other repercussions: Syria is a close ally of Iran and borders Iraq. Together, Iran and Iraq produce 6.23 million barrels of oil per day, about 20% of the entire output of OPEC. What’s more, Syria is also an ally of Russia, a country which produces 9.8 million barrels per day.
Yet, as the price of oil goes up, some oil companies haven’t benefitted. Exxon Mobil is one such example. Its stock is down 4% in the last two months. For the year, Exxon Mobil’s shares have been choppy but are down 2%.
Compare that the SPDR Energy Sector ETF (the XLE), a basket of energy and oil services companies. That ETF is flat over the last two months but up 15%.
So, as oil looks to go higher, is there a chance that Exxon Mobil will turn around?
To answer this question, we ask Steve Cortes, founder of Veracruz TJM, to look at the fundamentals of Exxon Mobil. On the charts is Mark Newton, Chief Technical Analyst at Greywollf Execution Partners.
Will Exxon Mobil move up with oil prices or will it take a hit? Watch the video above to see Cortes and Newton analyze the company.