Oil stocks such as Chevron (CVX) are trending higher after the OPEC+ cartel postponed plans to increase its oil production as global energy demand remains weak.
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The Organization of the Petroleum Exporting Countries and its allies (OPEC+) had been expected to unwind several crude oil production cuts in the coming year. But those plans have now been put off as OPEC+ members reassess global oil demand for the year ahead and beyond.
OPEC+ has extended its combined production of 39.725 million barrels of oil per day (bpd) until December 31, 2026. Previously, the quota was to expire at the end of 2025. Eight OPEC+ members will now extend their 2.2 million-barrel-per day voluntary production declines until at least April 2026.
CVX stock, along with other oil majors such as ExxonMobil (XOM), Shell (SHEL) and ConocoPhillips (COP), are up about 1% on news that OPEC+ production will remain constrained.
China Weakness
The delay in raising oil production comes as crude prices remain subdued amid tepid global demand, notably in China, which is the world’s largest energy importer. Adding to the current uncertainty is the return of president-elect Donald Trump, who has pledged to unleash American oil production.
On the election campaign trail this past summer, Trump promised to let U.S. oil and natural gas producers “drill, baby, drill.” Brent crude oil, the international benchmark, is currently trading at $72.59 per barrel. West Texas Intermediate (WTI) crude oil, the U.S. standard, is trading at $68.78 a barrel.
CVX stock has risen 11% this year.
Is CVX Stock a Buy?
Chevron’s stock has a consensus Strong Buy rating among 17 Wall Street analysts. That rating is based on 13 Buy and four Hold recommendations assigned in the past three months. The average CVX price target of $172.21 implies 8.11% upside from current levels.
Read more analyst ratings on CVX stock
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
