Declining U.S. crude stockpiles are causing the rise in crude prices though a global supply glut remains responsible for crude prices more than halving over the past 12 months.
U.S. crude stocks at the Cushing, OK delivery hub fell by 1.068 million barrels, according to the EIA.
Industry standard Brent crude for November delivery is up 0.62% to $48.53 per barrel while West Texas crude for November delivery is up 0.24% to $45.34.
TheStreet Ratings team rates EXXON MOBIL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate EXXON MOBIL CORP (XOM) 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 a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- XOM's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that XOM's debt-to-equity ratio is low, the quick ratio, which is currently 0.52, displays a potential problem in covering short-term cash needs.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 33.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 52.3% when compared to the same quarter one year ago, falling from $8,780.00 million to $4,190.00 million.
- The share price of EXXON MOBIL CORP has not done very well: it is down 24.10% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: XOM