A fire incident rocked oil major Chevron’s (CVX) refinery in El Segundo City in Los Angeles County, California, according to several media reports. The fire, which Chevron has described as “isolated”, emerged from a jet fuel production unit in the facility. However, CVX stock managed to trade just above the red line during early trading on Friday.
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According to The Los Angeles Times, the explosion produced huge flames visible in the sky from miles away. However, a spokesperson for Chevron has noted that no injuries were reported during the incident, even as the cause of the inferno remains unclear.
Furthermore, Los Angeles Mayor Karen Bass has stated that the fire had no impact on the Los Angeles International Airport, which is approximately three kilometers south of the facility. The refinery was built in 1911, spanning about 1,000 acres of land, with pipelines extending over 1,100 miles.
As of 2015, the facility had over 1,200 workers and produced 290,000 barrels of oil per day. Its major products are gasoline, jet, and diesel, according to a fact sheet from Chevron.
How’s Chevron Doing?
The incident comes at a time when many oil producers are in a cost-cutting mode as the price of crude oil struggles to rise above $70 a barrel. Chevron, earlier this year, trimmed its global workforce by 20%.
During its second quarter, which ended in June, Chevron saw its adjusted earnings decrease by $760 million, despite achieving record production outputs in both the U.S. and from its facilities worldwide. Furthermore, while the company expects to reach $1 billion in annual savings by the end of the year from its merger with Hess, an oil and gas exploration and development company, initial losses are still anticipated to range between $200 million and $400 million.
Is CVX a Buy, Hold, or Sell?
Chevron’s shares currently have a Moderate Buy consensus rating from Wall Street analysts. This is based on 10 Buys and five Holds assigned by 15 Wall Street analysts over the past three months.
However, the average CVX price target of $171.00 suggests an 11.50% growth potential from the current level.
