Short interest in Chevron
The short interest or percentage of outstanding shares in Chevron (CVX) has fallen from 1.12% on January 2 to the current level of 0.83%. Usually, a fall in the short interest indicates a rise in the positive sentiments for the stock. During the same period, Chevron’s stock price has risen 13.2%.
More positive sentiments
The positive sentiments in Chevron stock have risen due to its better earnings and cash flows and higher shareholder returns. In 2018, Chevron’s earnings rose and boosted its cash flows from operations. Chevron’s operating cash flows have sufficiently covered its capex and dividend outflows. The operating cash flows were in a surplus in 2018. Chevron has a higher surplus as a percentage of the cash flow from operations compared to its peers. The company bought back shares in 2018. As a result, the positive sentiments for the stock increased.
These sentiments were supported by the rise in oil prices in the current quarter. WTI crude oil prices have risen 26% in the quarter. Oil prices are vital to integrated energy stock’s upstream earnings. Higher prices could result in better upstream earnings for the company in the first quarter.
Peers’ short interest
The short interest in Equinor (EQNR) and Petrobras (PBR) has fallen by 0.05 percentage points and 0.17 percentage points, respectively, since January 2 to the current level of 0.12% and 0.65%, respectively. The short interest in PetroChina (PTR) has fallen by 0.08 percentage points since January 2 to the current level of 0.03%. If we review the stock prices, then Total and Petrobras have risen 4.0% and 18.4%, respectively, since January 2. PetroChina stock has risen 6.9%.