Exxon Mobil Corp (NYSE:XOM)'s shares surged by 1.9% to $108.45 last Friday, driven by soaring global oil prices. The rise in prices was catalyzed by the U.S. sanctions imposed on two shipping firms for violating Russian oil price restrictions and the Israel-Hamas conflict that induced supply uncertainties. Amid these geopolitical tensions threatening substantial regional oil output, West Texas Intermediate (WTI) crude oil spiked 3.5%, breaching $85 per barrel, thereby elevating concerns over oil availability.
The surge in Exxon Mobil's share price comes as the company stands to benefit from these price surges and disruptions by selling its commodities at premium prices. Geopolitical tensions typically elevate oil prices due to potential global supply curtailments. In light of the Israel-Hamas conflict, Goldman Sachs (NYSE:GS) also mirrors this bullish outlook on crude oil. Over the past year, Exxon's shares have oscillated between a high of $120.70 and a low of $98.02, according to InvestingPro data. The company's current market cap is $430.65 billion.
Last Friday, amid uncertainties from the Israel-Hamas conflict and potential Iran involvement, oil prices surged significantly due to tightened U.S. sanctions against Russian oil price violations and a considerable increase in U.S. crude oil stockpiles. Energy stocks, including ExxonMobil and Chevron (NYSE:CVX), saw increases in line with this trend. U.S. crude oil prices jumped 4% to over $86 per barrel, marking a 4% rise from the previous week but still falling short of WTI's September peak of over $93 per barrel.
The U.S. imposed sanctions on two shipping companies for violating the G-7's $60 per barrel price cap on Russian oil. The Israel-Hamas conflict and the potential for escalated sanctions against Iran were closely watched by oil traders. According to Morgan Stanley (NYSE:MS) analysts, the near-term risk to oil supply due to the Israel-Hamas conflict is limited but could change depending on how the situation evolves.
The Treasury Department, as confirmed by U.S. Treasury Secretary Janet Yellen, is actively reviewing its sanctions on Iran, Hamas, and Hezbollah, with no relaxation of any sanctions on Iranian oil. Amid ongoing U.S.-Iran negotiations, Iran crude oil has been gradually reentering the global market.
In the oil and gas sector, ExxonMobil confirmed its acquisition of Pioneer Natural Resources (NYSE:PXD) for nearly $60 billion, marking a strong week for the company. Other energy stocks, including Chevron and Halliburton (NYSE:HAL), also saw gains, reflecting a positive trend in energy stocks.
InvestingPro Tips suggest that ExxonMobil's consistent increase in earnings per share and its status as a prominent player in the Oil, Gas & Consumable Fuels industry make it a strong contender in the market. The company has also maintained dividend payments for 53 consecutive years and operates with a moderate level of debt. For more in-depth metrics and tips on ExxonMobil and other companies, consider exploring the InvestingPro platform here.
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