Why Chevron Stock Is Trading At All-Time Highs Today

Key Insights

• Chevron touches new highs as traders focus on the near-term future of the energy market.
• Earnings estimates will continue to move higher in the upcoming weeks.
• Chevron is better positioned compared to its European peers.

Chevron Stock Rallies As WTI Oil Crosses The $100 Mark

Shares of Chevron gained strong upside momentum after WTI oil rallied above the $100 level and attempted to settle above $105.

WTI oil gained strong upside momentum due to fears that sanctions on Russia will ultimately include energy. In another scenario, Russia could retaliate against Western sanctions, which could have an impact on energy markets.

Anyway, the market is worried about the safety of oil supplies in the near future. In addition, OPEC+ is expected to maintain its schedule of increasing oil production by 400,000 barrels per day (bpd) despite the recent events as OPEC+ countries are enjoying high prices and do not want to put any material pressure on them after several years of low prices.

What’s Next For Chevron Stock?

Analysts expect Chevron to report earnings of $10.8 per share in 2022, so the stock is trading at less than 14 forward P/E. Estimates for Chevron earnings have been growing in recent weeks, together with the price of oil. Obviously, they will continue to grow as analysts take the recent events into account.

The geopolitical situation remains volatile, and any additional sanctions on Russia or Russia’s counter-sanctions may have a meaningful impact on the world’s energy market.

In addition, some customers will try to avoid Russian oil entirely, which has already led to a significant discount on Russia’s Urals and premiums for WTI and Brent.

Chevron is well-positioned to profit from the current trends, and the stock will have a good chance to gain additional upside momentum in case WTI oil stays above the $100 level. As a reminder, WTI oil briefly went above the $140 level back in 2008, so there is plenty of room to gain more momentum for oil in case of a real crisis in energy markets.

For a look at all of today’s economic events, check out our economic calendar.