Oil prices had been rising for most of the day before turning negative in the afternoon ahead of OPEC's highly anticipated meeting on Friday.
Analysts expect the oil cartel to decide to maintain their current production levels.
Crude prices have fallen sharply over the past 18 months as OPEC has maintained its production levels despite increased supplies from U.S. shale operations.
OPEC's supply policy along with increased production from other producers has resulted in a supply glut which has continued to put negative pressure on crude contracts.
Industry standard Brent crude for January delivery is down 0.71% to $44.54 per barrel, while West Texas crude for January delivery is down 0.22% to $41.62 per barrel.
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, disappointing return on equity and weak operating cash flow.
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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.
- XOM, with its decline in revenue, slightly underperformed the industry average of 36.7%. Since the same quarter one year prior, revenues fell by 37.4%. 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, EXXON MOBIL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The share price of EXXON MOBIL CORP has not done very well: it is down 14.28% 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
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.