How Will Chevron’s Revenue Change If Crude Oil Prices Average $50 Per Barrel Until 2018?
Like most of the oil and gas companies across the globe, Chevron Corporation (NYSE:CVX), the US-based integrated energy company, has suffered a severe blow due to the slump in commodity prices over the last two years. The company’s overall revenue and EBITDA dropped close to 40% in 2015, due to the depressed commodity prices throughout the year.
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, since the outlook of commodity markets continues to be uncertain, there is a significant downside potential to the company’s top line as well as profitability. In such a case, where the volatility in the global markets continues due to the Organization of the Petroleum Exporting Countries (OPEC) maintaining its high level of production, or lower global demand for oil, crude oil prices could average at around $50 per barrel until 2018. In that case, we expect Chevron’s 2018 revenue to be roughly 20% lower than our base case estimates. Below, we show how each division would perform in the aforementioned base case and downside case.
Have more questions about Chevron (NYSE:CVX)? See the links below:
- How Will Chevron’s Revenue Move If The Crude Oil Prices Rebound To $100 Per Barrel By 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?
Notes:
View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap