Oil majors appear poised for a possible promotion amid the current market correction, with U.S. crude oil prices rising further above $90 per barrel and oil majors ExxonMobil, Chevron and BP near buy points. XOM along with Warren Buffett-backed CVX and Occidental Petroleum all advanced Wednesday .
West Texas Intermediate (WTI) oil prices climbed 3.8% above $93 per barrel on Wednesday, extending gains from the previous session amid concerns about tightening global supply. The U.S. oil benchmark has surged around 30% since the end of June.
Energy stocks have followed oil prices, rallying since June, after a fall off from 2022 highs driven by Russia's Ukraine invasion. U.S. oil producers and the Saudi Arabia-led Organization of Petroleum Exporting Countries and its partners have kept global oil supplies tight. But the outlook for demand remains uncertain, with China's economy struggling, and the outcome of the U.S. battle vs. inflation yet to be determined.
Crude Oil Prices Fuel NOV, IBD Stock Of The Day, Back Above Buy Point
In recent months, oil services, machinery, drilling and refining groups have taken the lead. Now oil majors could be ready to retake their market leading position.
ExxonMobil Stock: Energy Stocks Eye Buy Point
ExxonMobil stock advanced 3.3% to 120.21, moving above a buy point Wednesday during market action. Warren Buffett-backed Chevron stock and OXY also gained ground Wednesday. On Tuesday, XOM edged up a fraction to 116.41.
ExxonMobil has formed a cup-with-handle base with a 118.84 buy point, according to MarketSmith. On Friday, Wells Fargo raised its price target on ExxonMobil stock to 130, up from 127. Morgan Stanley analyst Devin McDermott also weighed in on XOM Friday.
McDermott upped his price target to 131, from 124, telling investors the firm retains its "preference for XOM within the U.S. majors."
The analyst sees ExxonMobil benefitting from stronger refining margins and offering "attractive growth projects" across its business segments.
ExxonMobil stock has a 77 Composite Rating out of 99. XOM has an 86 Relative Strength Rating and its EPS Rating is 32 out of 99.
Chevron Stock
Meanwhile, Chevron climbed 1.9% to 171.08, clearing an early entry of 168.96 on a consolidation going back to last November. If viewed as a base going back to April, 168.96 is an official buy point. On a weekly chart, this handle area is a three-weeks-tight, also with a 168.96 entry.
Warren Buffett's Occidental Petroleum has built a handle to its base, but is not yet actionable. OXY stock climbed 3.9% to 65.61. Bank of America on Wednesday raised its price target on OXY to 82 from 78 and keeps a buy rating on the shares.
ConocoPhillips has also formed a cup-with-handle pattern with a 124.99 buy point. COP stock angled up 3% to 123.10 Wednesday. On Sept. 18, Mizuho upped its COP price target to 139 on the basis that resurgent commodity prices are driving a share rebound in energy stocks.
Meanwhile, U.K. oil major BP has also formed a valid base, with a 39.73 handle entry. BP stock advanced 2.2% to 39.49.
Shell is currently in a flat base pattern and is in a buy zone, slightly above a 63.69 buy point. SHEL stock rose 1.6% to 64.90.
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