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Comparing Short Interest in XOM, CVX, RDS.A, and BP

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Short interest changes have been mixed in the third quarter. Integrated energy stocks ExxonMobil (XOM), Royal Dutch Shell (RDS.A), Chevron (CVX), and BP (BP) have fallen so far due to equity market volatility and oil prices. While short interest (the percentage of outstanding shares) in ExxonMobil, Shell, and BP has risen, it has fallen in Chevron.

Since July 2, ExxonMobil’s short interest has risen by 0.10 percentage points to 0.88%. Usually, a rise in short interest implies an increase in bearish sentiment. Similarly, BP’s short interest has increased by 0.14 percentage points to 0.25%, and Shell’s has risen 0.05 percentage points to 0.25%. However, Chevron’s short interest has fallen by 0.08 percentage points to 0.93%.

In the third quarter, ExxonMobil, BP, and Shell stocks have fallen 5.9%, 6.5%, and 10.1%, respectively. Chevron stock has fallen by just 0.1%. To learn more, read ExxonMobil or Chevron: Which Is the Better Buy?

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Plunging oil prices impact short interest

Oil prices’ fall may have boosted bearishness toward most integrated energy stocks. Since July 1, WTI prices have fallen 0.5%. They fell up until mid-September. But after the attacks on Saudi Arabia’s Aramco facilities, oil prices mostly recovered. Once Aramco’s operations are restored, oil prices could resume their downward journey.

Oil prices are a main determinant of integrated energy companies’ upstream earnings. This quarter’s fall in oil prices could mean lower upstream earnings, impacting short interest in integrated energy stocks.

Weak second-quarter earnings

Energy companies’ latest earnings results would have also impacted their short interest. While ExxonMobil and BP surpassed analysts’ earnings estimates, Chevron and Shell missed them. Their profit fell, mainly due to lower upstream realizations and weaker downstream margins.

However, their higher upstream production improved their earnings. Whereas Chevron’s, Shell’s, and BP’s profits fell across their business segments, ExxonMobil’s profits rose in its upstream segment.

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Bleak outlook for this year

Analysts expect energy companies’ earnings to fall this year due to crude oil prices weakening. They expect ExxonMobil’s, BP’s, Chevron’s, and Shell’s earnings to fall 31%, 17%, 10%, and 3%, respectively. These expectations may have boosted the stocks’ short interest.

Short interest in Chevron falls, optimism rises

Optimism toward Chevron stock may be due to the company’s record second-quarter hydrocarbon output. Its upstream production rose by 9% in the quarter.

Chevron has a robust upstream portfolio. Its Gorgon, Wheatstone, and Permian assets are set to grow its volumes. To learn more, read ExxonMobil and Chevron: Upstream Portfolio Positioning.

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