CVX, SHEL, BP: Oil Prices Rise as OPEC+ Leaves Output at Current Levels… for Now

Oil prices are reversing higher on news that the OPEC+ cartel plans to leave their production output unchanged until their next meeting in July.

There had been concerns about a supply glut as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) had previously raised its output earlier this year. But now, OPEC+ has agreed to maintain its current production for at least another month, sending prices for crude oil higher as a result.

Brent crude oil, the international standard, is trading at $65.31 a barrel, up 1.89%, while West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is trading at $62.27 per barrel, up 2.20%. The latest decision by OPEC+ is welcome news. But there are media reports that the cartel plans to accelerate its oil production come July.

The rise in oil price has the stocks of oil majors such as Chevron (CVX), Shell (SHEL), and British Petroleum (BP) trending higher as well.

Flooding the Market

At the same time, Iranian and U.S. delegations have wrapped up a fifth round of talks in Rome, Italy with many points of disagreement remaining between the two nations. If nuclear talks between the U.S. and Iran fail, it could mean continued sanctions on Iran, which would limit Iranian oil supply. However, a resolution would add Iranian oil to the global market.

While analysts are applauding the current uptick in crude prices, they say any upside to oil prices remains limited in the near-term until it becomes clear what OPEC+ will decide at its next meeting in July. Production increases have energy traders worried that the cartel will swamp the global market in oil, further depressing prices, which have already fallen nearly 15% this year.

Is CVX Stock a Buy?

The stock of Chevron has a consensus Moderate Buy rating among 18 Wall Street analysts. That rating is based on 10 Buy, six Hold, and two Sell recommendations assigned in the past three months. The average CVX price target of $159.50 implies 16.43% upside from current levels.

Read more analyst ratings on CVX stock