Oil sprung higher this week, given a new lease of life by promising vaccine news. The oil price gains make beaten up Big Oil stocks worth another look.
A name used to describe the world's six or seven largest publicly traded oil and gas companies, also known as supermajors. - Wikipedia (May 2020)
We have compared the share prices of 6 top global oil companies with the S&P 500 as a global benchmark:
Big Oil Price Performance Chart (3-months)
Oil stocks have bounced back with double digit gains from a 3-month period of massive underperformance but are still down over the period and continue to underperform the S&P 500 index as a benchmark.
It has been one of the most dramatic years for oil markets ever. From demand destruction caused by the coronavirus to the Russia-Saudi price war to US crude prices turning negative to higher prices as the economy rebounded again. While the price of the commodity has been volatile, the stock price of energy companies has headed in only one direction – lower. Not only is the price of oil unreliably volatile, making oil project planning nearly impossible but these energy companies face the challenge of an increasing shift away from their fossil fuel products to alternative sources of energy.
However, this week the price of oil skyrocketed - as did the share price of the big oil companies on the hope that Pfizer's vaccine, found to be effective in stage 3 trials will enable economies to fully reopen more quickly.
Big Oil stocks
BP = BP (UK)
CVX = Chevron (USA)
ENI = ENI (Italy)
XOM = Exxon Mobil (USA)
RDSB = Royal Dutch Shell (UK / Netherlands)
FP = Total (France)
SPX = S&P 500
Read our next article: Top 7 Tweets of the day - 12th of November 2020