U.S. oil prices dipped to their lowest level in more than four years early Thursday, focusing attention of first-quarter earnings reports due from Chevron and Exxon Mobil Friday morning. Analysts already expect another substantial profit decline for the U.S. supermajors. More than the top and bottom line numbers, investors will arguably be more interested in buybacks, any commentary on sinking oil prices and the impact of President Donald Trump's oil production policies.
By the numbers, analysts forecast Exxon Mobil earnings will decline 15% to $1.75 per share with sales increasing 4% to $86.35 billion, according to FactSet. Meanwhile, Chevron's Q1 EPS target is $2.16, marking a 26% drop vs. a year ago, with revenue totaling $48.25 billion, down around 1% compared to Q1 2024.
Meanwhile, West Texas Intermediate oil prices dropped more than 2% Thursday to below $57 per barrel, dipping to its lowest level since February 2021. Thursday morning's low of $56.39 was down more than 3% from Wednesday's settle price of $58.21, marking a drop of more than 10% since Friday. Thursday's low was almost 28% below the year's high of more than $78 chalked up on Jan. 13.
Brent futures, the international benchmark, also traded below $60 per barrel on Thursday.
Oil Price Skids To 4-Year Low; Goldman Slashes Oil Outlook
U.S. oil prices moved higher to around $59 per barrel Thursday afternoon.
The falling oil prices reflect expectations for demand destruction tied to the trade war launched by the U.S., as well as production increases among members of the Organization of Petroleum Exporting Countries.
Trump on Thursday announced on Truth Social that any person or country that buys oil or petrochemicals from Iran will not be allowed to do any business with the U.S.
Meanwhile, U.S. natural gas prices have swung wildly, increasing 20% so far this year.
XOM: Buybacks In The Crosshairs?
The U.S. supermajors' Q1 reports come after U.K.-based BP on Tuesday cut its buyback program after announcing weaker-than-expected earnings. BP reduced its buyback plan to $750 million per quarter, down from its previous $1.75 billion plan, partly due to falling oil prices.
Prior to BP's decision, investors were already concerned Exxon or Chevron might whittle away their buyback programs amid sinking oil prices, Reuters reported on Monday. Exxon has previously said it expects to repurchase $20 billion in shares annually through 2026, and last year paid $16.7 billion in dividends.
Chevron in 2023 guided annual share repurchases to between $10 billion and $20 billion by 2025, assuming Brent prices between $50-$70 per barrel. The company is currently in the process of cutting up to $3 billion in costs and laying off up to 8,000 employees.
Exxon stock and Chevron both added a fraction during Thursday's stock market action. The two U.S. supermajors both booked declines of more than 2% on Wednesday. Collectively, the 22 stocks in the IBD-tracked Oil & Gas-Integrated industry group have dropped more than 3% in 2025.
Shell, another U.K.-based company, also reports first-quarter earnings early Friday.
Exxon Mobil: Production Forecasts
In early December, Exxon Mobil went against the industry grain and boosted its capital spending outlook. The recent industry strategy has revolved around defending balance sheets, directing funds back into stock repurchases and dividends, and increasing production through acquisitions, rather than through increased drilling and well development.
Exxon Mobil, Chevron See Another Earnings Dip In Q4 But Report Production Increases
On Dec. 11, Exxon Mobil announced planned capital spending of between $27 billion and $29 billion for 2025 — essentially unchanged from the 2024 target of $28 billion. For the 2026 to 2030 period, Exxon projected spending between $28 billion and $33 billion. The company said it would increase production modestly, around 18%, by the end of the decade, to 5.4 million barrels of oil equivalent per day.
Exxon has primarily grown by focusing on expanding its Permian Basin assets in the U.S. Its acquisition of Pioneer Natural Resources, announced in October, was a $59.5 billion step in that direction.
Meanwhile, Chevron on Dec. 5 whittled back its 2025 capex budget to between $14.5 billion and $15.5 billion, below its prior $15.5 billion to $16.5 billion in planned 2024 spending.
The Shadow Of Guyana
Chevron also awaits a court decision on its acquisition of Hess, expected in the first half of 2025. Exxon, which operates the offshore Guyana project upon which Chevron's Hess deal hinges, claims it has the right of first refusal, ahead of Chevron's takeover.
The arbitration hearing is scheduled for May 2025. Chevron previously hoped for a decision in Q4 2024.
The energy industry touts offshore Guyana, a resource pioneered by Exxon, as the largest oil discovery in the last 10 years.
Hess on Wednesday topped Q1 expectations, even as profit slipped 43%. The company reported that the earnings decline was primarily driven by a 12% rise in operating costs and a higher effective tax rate, rather than commodity prices.
"The pending legal arbitration between ExxonMobil and Chevron over HES' 30% Guyana stake remains a key uncertainty, as we believe CVX will terminate its acquisition of HES if XOM prevails in the May proceedings, while a CVX victory would likely lead to a swift deal completion," CFRA analyst Stewart Glickman wrote on Wednesday.
Exxon And Chevron Stocks
XOM and CVX stocks fell 13.3% and 31.2%, respectively, in April as Trump's tariff and trade policy whipsawed the stock market. However, during the year's stock market trade, Exxon Mobil stock is down just 2% through Wednesday, while Chevron declined 6%.
Exxon Mobil stock has a 21-day average true range of 3.9%. The ATR metric is available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
There are exceptions, but given current stock market conditions, IBD generally suggests investors keep most of their portfolio focused on stocks with ATRs at or below 6%. Chevron has a 21-day average true range of 4.04%.
Exxon Mobil stock has a 51 Composite Rating out of a best-possible 99. XOM also has a 40 Relative Strength Rating and a 57 EPS Rating.
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