NEW YORK (TheStreet) -- Exxon Mobil (XOM) shares are down -0.8% to $101.78 on Friday following a report on the company's planned $1 billion investment to increase diesel fuel production at its refinery in Antwerp, Belgium, according to the New York Times.
The investment is a long-view bet on diesel production in Europe as Exxon Mobil executives see demand for gasoline decreasing while demand for diesel fuel increases.
More than half of new cars registered in Western Europe were diesel powered compared to 10% in 1990 according to the New York Times. Comparatively, only 3% of new cars in the U.S. are diesel powered
The sizable investment in Europe seems counter intuitive because of the extremely low margins and industrywide losses attributed to excess refining capacity on the continent.
TheStreet Ratings team rates EXXON MOBIL CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate EXXON MOBIL CORP (XOM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."