Exxon, Chevron Signal Stalling Investment As Oil Prices Lose Momentum | Stock News & Stock Market Analysis

Oil majors Exxon Mobil (XOM) and Chevron (CVX) don’t expect to raise their capital spending outlooks anytime soon, as crude prices have failed to sustain gains made late last year.

Exxon said it has no plans to adjust its capital expenditures guidance, which in January was set at $22 billion for 2017, representing a 14% increase from 2016, though Jeff Woodbury, vice president of investor relations and secretary for Exxon Mobil, told analysts on a conference call that the company has identified and captured capital efficiencies.

And Chevron CFO Patricia Yarrington said during the company’s call that she expects future spending to be near the bottom of its capital expenditure forecast if Brent oil prices stay around $50 per barrel. She didn’t specify a range, but in December, Chevron guided 2017 capex at $19.8 billion, which is down from $22.4 billion in 2016 and $34 billion in 2015.

Brent rose 0.6%, to $51.73 per barrel, and U.S. crude climbed 0.7% to settle at $49.33 a barrel after hitting a one-month low Thursday. But U.S. oil fell 2.5% for April and is more than 10% lower since the year began.

OPEC and key allies are mulling whether to extend production cuts beyond midyear, while knowing that an extension would lift oil prices again and further encourage U.S. companies to pump more oil, weighing down on prices later. A decision is expected at the biannual OPEC meeting on May 25.

Exxon said it’s being cautious as the oil market tries to rebalance, with North American gains lifting non-OPEC production, but added that underlying growth of oil demand has been generally strong, above the 10-year average.

Exxon shares rose 0.5% to 81.65 on the stock market today, and Chevron climbed 1.2% to 106.60 as both reported strong Q1 profits. BP (BP) will report results Tuesday and Royal Dutch Shell (RDSA) will be out Thursday.

Exxon reported first-quarter earnings that more than doubled to 95 cents per share, beating Wall Street views for 85 cents. Revenue rose 30% to $63.3 billion, falling short of views for $64.73 billion. Upstream operations swung to a profit of $2.3 billion vs. a loss of $76 million a year ago. Downstream earnings rose by $210 million to $1.1 billion on increased refinery throughput.

Chevron swung to a profit of $1.41 vs. a loss of 11 cents a share a year ago, crushing views for EPS of 86 cents. Revenue jumped 42%, to $33.4 billion, better than views for $33.3 billion. Upstream operations swung to a profit of $1.52 billion from a loss of $1.46 billion a year ago. Downstream earnings climbed 26%, to $926 million.

While the oil giants’ overall investment forecasts look stagnant, activity in the Permian Basin is rapidly heating up.

Chevron’s U.S. production fell by 4%, to 672,000 barrels per day in Q1, but output increased in the Gulf of Mexico and the Permian, where output jumped 33%.

Last month, Chevron said it expects 325,000 to 450,000 barrels per day out of the Permian by 2020, and earlier this year Watson said it “wouldn’t…

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