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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Will the oil price outlook dip on US jobs data stoking demand fears?

The oil price forecast looks set to slide after US employment data fuels energy demand fears and investors grow increasingly concerned about the prospect of a slow economic recovery.

Oil Source: Bloomberg
  • Oil price forecast set to slide as US employment data fuels energy demand fears
  • Brent crude and the US Western Texas Intermediate extend losses
  • Oil price drops below key support

The oil price forecast slides after US jobs data fuels investors’ concerns that energy demand will weaken further and the wider economy will suffer a slow recovery.

The news will likely drive Big Oil stocks lower on Friday, with Exxon Mobil, Chevron and ConocoPhillips have all trended lower this week and all down more than 32% year-to-date.

Brent crude falls below key support

Josh Mahony, senior market analyst at IG, warned that a break below $44.04 for Brent crude could point toward further losses.

Brent crude is trading 22 cents lower (0.5%) at $43.85 at the time of publication, while the US West Texas Intermediate (WTI) is also down 22 cents (0.53%) to $41. 15 a barrel.

‘However, it makes sense to watch for whether we see any rebound from 61.8% or 76.4% Fibonacci support to indicate whether this is a reversal or retracement,’ he added.

Major investment firm dumps Big Oil stocks over climate policy

The Norwegian life insurance company Storebrand ASA has divested from US oil and gas majors Exxon Mobil and Chevron after upgrading its climate policy, with the financial services firm wishing to end its investment in coal and accelerate the transition to renewables.

Storebrand’s tightening of its climate policy will contribute to companies around the world contributing to reducing emissions and adapting operations to help the environment.

‘We aim to be a leading provider of sustainable investment solutions,’ Jan Erik Saugestad, executive vice president at Storebrand. ‘Climate risk is one of the biggest challenges facing the world and investors.’

‘Therefore, investors must move large amounts of capital to companies that deliver solutions to the climate crisis - and away from companies that do not take climate risk seriously,’ he added.

Exxon Mobil dramatically reduces capital expenditure amid Covid-19

The oil and gas major has significantly cut spending in 2020 by almost a third to around $23 billion, with the company doing all that it can to maintain its dividend after it reported losses for the first half of the year.

‘We have evaluations underway on a country-by-country basis to assess possible additional efficiencies to right-size our business and make it stronger for the future,’ Exxon Mobil spokesperson Casey Norton told Reuters.

As part of its cost-cutting programme, Exxon is looking to sell a 50% stake in its Bass Strait oil and gas venture based in south-eastern Australia, which is valued at approximately $3 billion.

How to trade stocks with IG

Looking to trade Exxon Mobil, Chevron, ConocoPhillips and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Exxon Mobil’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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