Crude oil prices have hit a five-week low as concerns mount about a global oversupply and weakening demand.
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Brent crude oil, the international standard, is currently trading at $68.82 a barrel, while West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is at $66.36 per barrel. Both prices are up about 1% on Aug. 6 after falling to their lowest level in more than a month as the energy market experiences jitters.
Energy traders and analysts say they are increasingly concerned about supply disruptions after U.S. President Donald Trump’s threats of tariffs on India over its Russian crude imports. At the same time, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed in recent days to raise their collective oil production by 547,000 barrels per day in September.
The production increase has raised concerns of a global oversupply at a time when economic growth and energy demand are slowing. The current situation is impacting the stocks of oil majors such as Chevron (CVX), ExxonMobil (XOM), and Occidental Petroleum (OXY).
Geopolitical Tensions
The OPEC+ cartel currently produces about half of the world’s oil and had been curtailing production for several years to support the global market, but the group introduced a series of accelerated output increases this year to help it regain market share.
Meanwhile, the U.S. is demanding that India stop buying Russian oil as Washington seeks ways to push Moscow for a peace deal with Ukraine. The rising geopolitical tensions could upset supply flows as Indian refiners seek alternatives and Russian crude is redirected elsewhere. Officials in New Delhi have called the U.S. threats “unjustified.”
Is CVX Stock a Buy?
The stock of Chevron has a consensus Strong Buy rating among 17 Wall Street analysts. That rating is based on 12 Buy and five Hold recommendations issued in the last three months. The average CVX price target of $168.65 implies 10.20% upside from current levels.
