How Will Chevron’s Revenue Move If Crude Oil Prices Rebound To $100 Per Barrel By 2018?
The commodity downturn that began in the second half of 2014 has severely impacted most of the oil and gas companies across the globe, including the US-based integrated energy company, Chevron Corporation (NYSE:CVX). The oil and gas giant’s revenue and EBITDA dropped close to 40% in 2015, due to the weak commodity prices throughout the year. As a result, the company’s stock dropped from its all-time high of $133 per share to close to $100 per share, representing a drop of more than 30% since mid-2014.
Based on the current commodity prices, and the market trends, we forecast a gradual recovery in crude oil prices over the next couple of years. We estimate crude oil to rebound to around $70 per barrel by 2018 in our base case. However, in case the market conditions improve over the next few quarters, due to the Organization of the Petroleum Exporting Countries (OPEC) or the US oil producers cutting down their high level of production, or stronger-than-expected global demand for oil, crude oil prices could surge back to almost $100 per barrel by 2018. In such a case, we expect Chevron’s 2018 revenue to be approximately 25% higher than our base case estimates. Below, we show how each division would perform in the aforementioned base case and upside case.
Have more questions about Chevron (NYSE:CVX)? See the links below:
- How Will Chevron’s Revenue Move If Crude Oil Prices Average At $50 Per Barrel Until 2018?
- Is LNG The Next Big Thing For Oil And Gas Companies?
- Chevron’s 2Q’16 Earnings To Be Severely Hit Due To Persistently Low Commodity Prices
- What’s Chevron’s Revenue & Earnings Breakdown In Terms of Different Products?
- What’s Chevron’s Fundamental Value Based On Expected 2016 Results?
- What Has Led To More Than 30% Decline In Chevron’s Revenues & EBITDA In The Last Five Years?
- How Has Chevron’s Revenue Composition Changed In The Last Five Years?
- By What Percentage Can Chevron’s Revenues Grow Over the Next Five Years?
- Why Crude Oil & NGLs Operations are 3x As Valuable As Refined Products Operations For Chevron?
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