Exxon Oscillates on Macro Drivers: China Data & Euro Zone Progress

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Exxon Mobil

Exxon Mobil (NYSE:XOM) saw its stock price rise last week as the markets reacted positively to steps taken by European governments to contain the Greek crisis from spreading. The stock rose about 3.5% on Monday and then traded in a 2% range as new China crude imports in September fell 12.2% year on year as the country braced up for a possible future global slowdown. [1]

The IEA expects China to account for more than half of the global incremental demand for oil this year. [2] The unexpected weakness in demand from the world’s No.2 oil consuming nation could pull down oil price hurting  the revenues for oil majors.

In the downstream end of the business, Exxon awarded a contract to Technip for a grassroots lubricant base stock facility at its integrated facility in Texas that has both refining and chemical plant operations. [3]

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Exxon’s nearest competitor by size Chevron (NYSE:CVX) indicated that its Q3 results would be in line with those of the previous quarter but with lower oil prices slightly cutting into revenues. Most oil majors are expected to show similar trends.

We have a $93 price estimate for Exxon Mobil which is roughly a 20% premium over its current price.

Click here for our full analysis of Exxon Mobil.

Notes:
  1. Oil Prices Retract on Signs of a Slowing China, The Street []
  2. Analysis – China’s oil demand set to lead world again in 2012, Reuters []
  3. Exxon Mobil Corporation Makes Partnership Decision, EMoneyDaily []