{"id":102484,"date":"2017-02-23T06:05:30","date_gmt":"2017-02-23T11:05:30","guid":{"rendered":"http:\/\/countingpips.com\/?p=102484"},"modified":"2018-06-05T22:48:04","modified_gmt":"2018-06-05T22:48:04","slug":"xombrent-technical-analysis-oil-price-increase-may-trigger-shale-plays-development","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/02\/xombrent-technical-analysis-oil-price-increase-may-trigger-shale-plays-development\/","title":{"rendered":"XOM\/BRENT: Technical Analysis – Oil price increase may trigger shale plays development"},"content":{"rendered":"
February 23, 2017<\/div>
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By IFCMarkets<\/a><\/p>\n

Oil price increase may trigger shale plays development<\/strong><\/p>\n

In this report we consider studying the personal composite instrument (PCI) \u201dExxon Mobil stocks against Brent\u201d<\/a>. It may increase in case Exxon Mobil stocks growth outpaces the Brent oil prices.<\/p>\n

In 2016 the oil service producer Exxon Mobil reported its lowest earnings in recent 20 years and had to white off some assets. Given low oil prices, the development of some of the company\u2019s plays may also be deemed unprofitable. For this reason, the company\u2019s stocks slumped 9.3% since early 2017. Exxon Mobil makes part of Dow Jones Industrial Average index which rose 5% since the start of this year. The main reason for such negative performance is that investors worry that the company will have to write off the additional part of its assets. Besides the Canada\u2019s stockpiles of 3.6bn barrels, Exxon Mobil holds shale oil stockpiles of 6bn barrels in the Permian Basin in the US state of Texas. Meanwhile, as mentioned previously, the development of shale plays may be profitable with WTI price at $50-55 a barrel. The level is closed to the current prices which may negatively affect the operating performance of Exxon Mobil. The global oil prices have potential for further increase. OPEC and Goldman Sachs investment bank forecast the significant decline in global stocks in 2nd quarter of 2017. They believe the main reason for that may be quick fulfillment of OPEC and independent oil producers agreement to cut oil production by 1.8mln barrels a day since January 1, 2017. According to the most recent data, the agreement is implemented by 90% already. The additional positive for Exxon Mobil may come if Rex Tillerson is appointed as secretary of state under Trump\u2019s presidency. Rex Tillerson has been serving in the capacity of the company for more than 40 years.<\/p>\n

\"XOM\/BRENT\"<\/p>\n

On the daily chart XOM\/BRENT: D1<\/b> has hit a fresh 17-month low having approached the lower boundary of the descending channel. Upward correction is possible in case Exxon Mobil stocks perform better than Brent oil.<\/p>\n