Exxon (EOM) And Chevron (CVX): The Safey Of Big Oil In A Bad Market

Energy

Published: November 10, 2007 10:05 am

Some on Wall St. are concerned that, as the price of oil reaches closer to $100, Big Oil will not do as well as the rising price of crude would indicate. That is, to some extent true. Refinery margins are not great now, and the costs of getting oil out of the ground is higher.

But, in the market carnage last week, oil stocks kept their value. A look over the most widely traded stocks showed that almost all of them were down. Citigroup (C) fell another 12.3%. EMC (EMC) was off 18.9% because VMWare (VMW), a recent partial spin-off still majority owned by the storage company, was hit hard. Apple (AAPL) dropped 12%, and Research in Motion (RIMM) was down almost 12%. Cisco (CSCO) lost 12% of its value as well.

Shares in Exxon (XOM) were off a mere .8%. Chevron (CVX) was down 1.4%. Exxon is still up about 17% for the year. The company has a modest 1.6% yield.

There is no reason to believe that financial or tech shares will stage wild rallies. The market has seen too much bad news in both sectors.

Oil is a different matter.

Douglas A. McIntyre

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