Oil price set to trade sideways, symbolic Dow Jones exit for Exxon

Brent crude continues to trade in and around $45 a barrel, with the dim oil price outlook prompting the symbolic exit for Exxon from the Dow Jones Industrial Average index.

Oil prices were trading at around $61 a barrel at the start of the year, only for them to crash in March as lockdowns eroded energy demand and markets panicked to make sense of the coronavirus pandemic, with futures contracts closing at -$37 a barrel in April amid the turmoil.

According to the US Energy Information Administration (EIA), global oil prices are expected to average at $43 a barrel throughout the second half of this year, with that figure expected to rise to $50 in 2021.

Brent crude once again broke above the $45 a barrel this week, where it will likely hover around at for the remainder of the year, while the US West Texas Intermediate (WTI) rallied through $43 on Wednesday.

However, it remains unclear if oil price forecasts will be realised or if they will fall short of expectations considering the myriad of headwinds battering financial markets face over the next 14 months?

Oil market turmoil leads to symbolic Dow Jones exit for Exxon

A shake-up in the Dow Jones Industrial Average index offered insight into how the negative price outlook for crude is impacting companies operating in the oil and gas industry.

Exxon Mobil was once the world’s most valuable stocks and has been a member of the Dow Jones since 1928. But next Monday, the oil and gas major will no longer feature on the index due to its share price falling more than 40% this year amid low crude prices.

However, the oil and gas major could return to the index if demand recovers, but that outcome relies on a stabilising of the coronavirus crisis which continues to hinder global economic activity.

Rivals like BP and Royal Dutch Shell have suffered similar slumps in their respective share prices due to the challenging market conditions. But both have opted to write-off billions in oil and gas assets in order to focus their attention on transitioning to renewables due to the dim price outlook for crude.

‘Energy markets are fundamentally changing, shifting towards low carbon, driven by societal expectations, technology and changes in consumer preferences,’ BP chairman Helge Lund said in a statement. ‘And in these transforming markets, bp can compete and create value, based on our skills, experience and relationships.’

‘We are confident that the decisions we have taken and the strategy we are setting out today are right for BP, for our shareholders, and for wider society,’ he added.

Without Exxon, the Dow Jones only remaining oil and gas company is Chevron.

WTI: technical analysis

Oil has finally found the strength to move higher, rallying through $43. Above $43.66, the price will have made a new higher high in the current uptrend, reinforcing the bullish view, according to Chris Beauchamp, chief market analyst at IG.

‘Alternately, a reversal below $41.50 is the catalyst that bears will be looking for,’ he added.

How to trade stocks with IG

Looking to trade Exxon Mobil 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

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Trade on commodities

Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1

  • Wide range of popular and niche metals, energies and softs
  • Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
  • View continuous charting, backdated for up to five years

1In the case of all DFBs, there is a fixed expiry at some point in the future.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.