Big Oil Fares Poorly With Drop in Oil Prices

As oil went from $105 to under $85 in just over a month, you can imagine that the drop was not too good for Big Oil.  In fact, the news was pretty dismal and shareholders better be glad that Exxon Mobil Corporation (NYSE: XOM) and Chevron Corporation (NYSE: CVX) entered into a dividend war at the end of April.  Had those two companies waited until now, they might consider a different stance on being so aggressive with their payouts.  We wanted to see just how these large oil and oil services players have help from the end of April to today with oil now close to $84.00 per barrel in WTI.  The performance is dividend-adjusted if applicable.

Exxon Mobil Corporation (NYSE: XOM) has lost 9.6% from the end of April, and the $77.50 share price compares to a 52-week range of $67.03 to $87.94.

Chevron Corporation (NYSE: CVX) has lost 8.7% from the end of April, and the $96.40 share price compares to a 52-week range of $86.68 to $112.28.

ConocoPhillips (NYSE: COP) is a split-adjusted price for its spin-off.  After rising over 1% on Tuesday to $51.92, this one is down 3.7% from the end of April.  The $51.92 share price compares to a 52-week range of $50.62 to $80.13 but we would warn that the upper price may not reflect that split.

BP PLC (NYSE: BP) still remains under $40 and its $36.75 price on Tuesday is actually down over 14% from the $42.89 adjusted price at the end of April.  BP’s 52-week range is $33.62 to $48.34.

In the oil services sector, Schlumberger Limited (NYSE: SLB) has lost almost 16% from the end of May and its $62.10 share price compares to a 52-week range of $54.79 to $95.53. Halliburton Company (NYSE: HAL) just hit under $29.00 and is down almost 15% from the end of April against a 52-week range of $27.21 to $57.77.

Here is why some analysts are getting bullish on airlines, even if they got stung on Monday.

And as far as dividends, we have recently outlined the concerns we have for master limited partnerships to consider this summer.

JON C. OGG