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Why Has Chevron Stock Surged ahead of Its Earnings?

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Chevron’s returns

In this article, we’ll review Chevron’s (CVX) performance ahead of its first-quarter earnings release. In the past month, since March 8, 2019, Chevron stock has risen.

Let’s compare Chevron’s returns to those of the SPDR S&P 500 ETF (SPY), the broader market indicator, and WTI, the benchmark oil.

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Stock performance

Oil prices have risen 15.2% in the past month due to OPEC’s production cuts, which could continue in the second half of 2019 as well. US sanctions against Iran and Venezuela have also supported oil prices. Further, equity markets have risen. SPY has risen 5% since March 8. Chevron stock has surged 3.2% in the same period. Positive sentiments surrounding US-China trade talks have supported the market. Further, expectations of a lack of interest rate hikes in 2019 have helped the market.

Chevron’s robust upstream volumes may also have supported its stock. The company’s fourth-quarter production touched a record high of 3.08 MMboepd (million barrels of oil equivalent per day). In comparison, BP’s (BP), ExxonMobil’s (XOM), and Royal Dutch Shell’s (RDS.A) productions stood at 2.63 MMboepd, 4.01 MMboepd, and 3.79 MMboepd, respectively, in the quarter.

Peer comparison

ExxonMobil, Total (TOT), and PetroChina (PTR) have risen 3.2%, 0.2%, and 5.2%, respectively, since March 8. BP, Petrobras (PBR), and YPF (YPF) have risen 6.6%, 13.4%, and 16.7%, respectively, in the same period.

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