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Actionable news in XOM: EXXON MOBIL CORPORATION,

Exxon Stock Will Soar With The Imminent Rise In The Oil Price

  • Oil prices are poised to increase, which will cause Exxon's upstream earnings to recover.
  • One factor that can change the fragile balance between oil supply and demand is the economic crisis in Venezuela.
  • The average target price of the top analysts is at $94, however, in my opinion, shares could go higher.
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Historically most Exxon Mobil (NYSE:XOM) earnings came from upstream (exploration and production) operations. Before the crash in oil prices, upstream operations accounted for about 75% of Exxon's earnings. However, as a result of the fall in oil prices, Exxon's earnings from upstream operations declined from $6,416 million in the third quarter of 2014 to a loss of $76 million in the first quarter of 2016. In the second quarter of 2016 upstream operations achieved a small profit of $294 million, as shown in the chart below.

However, in my opinion, oil prices are poised to increase significantly, which will cause Exxon's upstream earnings to recover, greatly benefiting its stock price. There are continuing signs of improving oil fundamentals. According to OilPrice.com, market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year.

One factor that can change the fragile balance between oil supply and demand is the economic crisis in Venezuela. This country which holds the worlds largest proven oil reserves has...


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