E Weekly Energy Roundup: Oil And Gas Companies, Jan. 8 - 12

Source: Fidelity Investments

Chevron’s stock price action was fairly impressive over the past two weeks, although the vast majority of its positive performance was delivered in the latter half of the most recent week. Prior to that, Chevron shares were almost completely flat. The stock opened on Tuesday, January 2, 2018 at $125.71. Thus, the shares delivered a positive return of 6.28%. Shareholders should certainly be pleased with this performance.

Source: Fidelity Investments

Chevron was another of the companies that was sued by New York City over global warming, so the same comments apply to it as apply to ExxonMobil. It will also suffer from the loss of a large investor as the city’s pension funds pull out of their fossil fuel investments, although the actual performance hit could be minimal depending on the willingness of other investors to pick up the shares as well as the speed of the divestures.

Chinese oil giant Sinopec (SNP) also committed to purchasing numerous assets in South Africa from Chevron following the approval of the nation’s government. While this deal will result in a significant amount of cash coming into Chevron’s bank account following consummation, it will also result in the latter company no longer having those productive assets in South Africa. The company will thus need to find new investments for the cash as simply returning it to the shareholders will ultimately be self-defeating.

Finally, on Thursday, BMO Capital upgraded Chevron to a “Buy.” The company’s stock proceeded to hit a 52-week high following the upgrade.

BP (BP)

BP also delivered a strong gain over the week to its shareholders. The stock opened on January 8, 2018 at $42.99 per share. It declined slightly early in the week but then reversed course and began to climb on Thursday, ultimately closing the week at $43.91 per share. This represents a gain of 2.14% for the week.

Source: Fidelity Investments

BP shares had surprisingly minimal volatility over the past two weeks, although there were certainly some up days and down days. The shares began trading on January 2 at $42.06 and ultimately closed on January 12 at $43.91. This represents a two-week gain of 4.40%.

Source: Fidelity Investments

BP was yet another company named as a defendant in the lawsuit by New York City, so the comments that were made about ExxonMobil would apply to BP as well. In addition, BP is likely to be one of the companies that is divested by the City’s pension funds, so it could see its stock decline at the time that this happens depending on the willingness of other investors to pick up the shares at an appropriate price and the speed at which the pensions divest their fossil fuel holdings.

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