U.S. oil companies' shares rose in premarket trading on Monday as investors bet that President Donald Trump's move against Venezuela's leadership would allow American firms greater access to the world's largest oil reserves.
Shares in the oil sector were flying on Monday, led by Chevron and ConocoPhillips, as investors scrambled to assess what the capture of Venezuelan President Nicolás Maduro by the U.S. military over the weekend could mean for the industry.
Shares of U.S. oil companies soared in premarket trade on Monday, as investors monitor the fallout from the White House's military operation in Venezuela.
A former top Chevron executive, Ali Moshiri, is raising $2 billion for Venezuelan oil projects after the U.S. captured its leader Nicolas Maduro and President Donald Trump said Washington would take control of the oil-producing nation, the Financial Times reported on Monday.
Chevron stock has risen a paltry 6% in the last year, according to Google Finance – a far cry from the S&P 500's 16.4% rise.
Secretary of State Marco Rubio said the U.S. will use leverage to achieve its policy aims in Venezuela. It comes one day after the U.S. captured Venezuelan President Nicolas Maduro.
Trump announces plans for U.S. energy companies to return to Venezuela and rebuild its oil infrastructure, targeting the world's largest oil reserves.
Chevron is uniquely positioned as the only major oil company operating in Venezuela. CVX's deep familiarity with Venezuelan assets gives it a strategic head start if the U.S. revives Venezuelan oil production. While CVX trades at a P/E of ~21, current oil prices are weak; cyclical valuation should be assessed over the business cycle.
The country says its proved oil reserves top 300 billion barrels which, if true, would make its bounty the world's largest.
CVX starts production at Angola's South N'dola field, using existing infrastructure to boost output, jobs and support oil and LNG growth.
CVX's unit locks in a long-term crude supply from Frontera Energy through a deal worth up to $120 million, starting with an $80 million prepayment.
Frontera Energy's Colombian unit has signed a prepayment and commercial agreement worth up to $120 million with a unit of U.S. oil major Chevron to supply crude oil over two years, the Canadian oil producer said on Monday.