Chevron (CVX) Stock Closes Up on Higher Oil Prices

Chevron (CVX) stock closed in the green after oil prices rebounded following the release of the Fed policy meeting minutes which indicated a possible December interest rate hike.
By Amanda Gomez ,

NEW YORK (TheStreet) -- Chevron Corp. (CVX) - Get Report stock closed higher by 1.3% to $92.21 on Wednesday afternoon as oil prices recovered from earlier losses after minutes from the latest Fed policy meeting showed support for a rise in interest rates next month, Reuters reports.

WTI crude is up 0.05% to $40.69 per barrel, while Brent crude is rising 1.45% to $44.20 per barrel this afternoon, according to the CNBC.com index.

If the Fed increases interest rates next month, oil and other commodities traded in U.S. dollars would become more expensive to hold abroad, Reuters noted.

Earlier today, oil prices slumped after U.S. commercial crude oil inventories increased by 252,000 barrels for the week ended November 13, according to data from the U.S. Energy Information Administration.

Production fell to 9.18 million barrels per day during the same week, from 9.19 million barrels per day the previous week.

"This week's data point is unlikely going to relieve the selling pressure on the oil markets with U.S. stocks at record levels for this time of year and knocking on the all-time high set earlier in the year," Caprock Risk Management analysts Chris Jarvis told Reuters. "Production remains resilient even in this low price environment."

San Ramon, CA-based Chevron is an oil and gas company that operates various segments, including crude oil and natural gas production, oil refining, and transportation and marketing of its products.

Separately, TheStreet Ratings team rates CHEVRON CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate CHEVRON CORP (CVX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CVX's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.
  • CVX, with its decline in revenue, slightly underperformed the industry average of 36.8%. Since the same quarter one year prior, revenues fell by 37.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHEVRON CORP's return on equity is below that of both the industry average and the S&P 500.
  • CHEVRON CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CHEVRON CORP reported lower earnings of $10.14 versus $11.09 in the prior year. For the next year, the market is expecting a contraction of 67.3% in earnings ($3.32 versus $10.14).
  • You can view the full analysis from the report here: CVX

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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