Despite widespread pessimism among analysts, these negative underlying reasons appear to have already been reflected in the oil price. There is a lot of technical support below the $43 level, which is 7.7 percent lower than Tuesday's closing price of $46.28.
Keep a close eye on these three oil and gas bellwethers if oil prices continue to drop and test this frequently observed support level.
It has been months since Russia's invasion of Ukraine interrupted the energy supply and pushed the price of oil to record highs. President Biden ordered the largest-ever release from the U.S. emergency oil stockpile on March 31 to lower gasoline prices. For six months, beginning in May, the Strategic Petroleum Reserve (SPR) was to release 1 million barrels of crude oil per day (B/D) from the SPR. However, the price of oil has risen since the news was made. According to Biden administration officials, the cost would have been more excellent if the SPR had not been tapped.
Oil and gas company Exxon Mobil (XOM)
Oil and gas exploration and production business Exxon Mobil Corporation (XOM) operates in the Americas, Europe, Africa, and Asia-Pacific.
This Texas-based company produces 2.3 million barrels of oil and roughly 10 billion cubic feet of natural gas daily. With a market cap of $304.83 billion and a dividend yield of 4.43 percent as of December 19, 2018, the stock price of Exxon Mobil is $72. The company has lost 7.62 percent this year, which is over 4% less than the S&P 500 Index's total loss.
Despite its 16.74 percent discount to its year-to-date high of $86.48, Exxon Mobil's shares will support between $70 and $71 from the March swing low. A bounce from this level becomes more likely as the RSI approaches oversold territory. A stop-loss order should be placed slightly below $70, and long-term investors can consider taking profits if the price reaches $82, where a horizontal line may serve as resistance.
Chevron is an oil and gas business (CVX)
Founded in 1879, Chevron Corporation (CVX) operates in the energy, chemicals, and oil & gas sectors worldwide.
The company has a market value of $209.69 billion and produces 2.7 million barrels of oil and 6 billion cubic feet of gas per day. Chevron's stock has dropped 6.6% this year and 1.21 percent in the last month, as of December 19, 2018. Investors have relied on the stock's 3.98 percent dividend yield to compensate for some losses.
Between $128.91 and $104.01 was the average price of Chevron's stock in 2018. Those February and October swing lows are expected to support between $106 and $108. In this area, traders should look for an entry point. If the price falls to this level in the coming days, the RSI may go below 30. It's normal to expect oversold situations. After a loss of $104 and a profit of $120, traders might consider selling their positions. This area may be a point of resistance for the stock because of previous market movements.
ConocoPhillips is an oil and gas business (COP)
With a market value of $71.27 billion, ConocoPhillips (COP) is an oil and gas exploration and production company primarily operating in North America, Europe, and the United Kingdom. 3.3 billion cubic feet of natural gas and 800,000 barrels of oil are produced every day. Due to an increase in revenue and a decrease in debt, ConocoPhillips stock has gained 12.79 percent year-to-date.
During the first nine months of the year, ConocoPhillips' stock price climbed but fell sharply in October, November, and December due to a decrease in oil prices. Waiting for the stock to hold $60, which is support from the significant January swing high, before placing a trade is a good strategy for traders looking to play an uptrend. Profit can be taken from orders made between $66 and $68 when the 50- and 200-day SMAs and horizontal lines are likely to cause the price to stall. If you don't want to lose money, place a stop order a few dollars below where you bought it.
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