Stronger than expected U.S. economic growth is responsible for today's increase, according to Reuters, as the U.S. economy grew at an annual pace of 3.9% in the April through June quarter.
Analysts were expecting the gross domestic product to grow by 3.7% in the quarter.
Industry standard Brent crude for November delivery is up 0.35% to $48.34 per barrel while West Texas crude for November delivery is up 1.22% to $45.46 per barrel.
Analysts at Standar & Poor's reduced their Brent and West Texas price forecasts for the year by $5 each to $50 per barrel and $45 per barrel respectively, according to Reuters.
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 largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CVX's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
- CVX, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 34.8%. 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHEVRON CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for CHEVRON CORP is rather low; currently it is at 20.59%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.63% trails that of the industry average.
- You can view the full analysis from the report here: CVX