Exxon Mobil stock's support from institutional investors is being tested as an interim agreement between the U.S. and Iran bears relief for global oil markets.
On Wednesday, President Donald Trump signed a memorandum of understanding with Iran that begins a 60-day period for finalizing a possible peace deal to end the four-month conflict. The agreement lifted Iranian shipping restrictions on the Strait of Hormuz, a key waterway for oil transportation, easing energy prices as the supply of oil increases.
U.S. West Texas Intermediate futures fell to around $76 per barrel on Thursday. Prices moved below $80 per barrel on Monday for the first time in months. While oil prices are tumble from recent highs, energy costs will likely remain high for the immediate future as shippers continue to watch for developments or whether the U.S.-Iran deal will hold. Meanwhile, refineries that depend on oil transported through the Strait of Hormuz will likely need time to resume production.
U.S. energy names fell on the news, with Exxon Mobil (XOM) stock plunging more than 4% on Monday, The stock tumbled 6.3% for the week to 137.81, just above its 200-day moving average. XOM stock has been trending lower since early April as a U.S.-Iran ceasefire got underway.
Still, institutional buyers are still likely to give Exxon stock some support. "In our model, the billion dollar funds were buying Exxon, they're buying Valero, they're buying (chemical company) Corteva," Scott Bennett, founder of Invest with Rules and IWR Advisors, told the "Investing with IBD" podcast.
On Wednesday, President Donald Trump signed a memorandum of understanding with Iran that begins a 60-day period for finalizing a possible peace deal to end the four-month conflict. The agreement lifted Iranian shipping restrictions on the Strait of Hormuz, a key waterway for oil transportation, easing energy prices as the supply of oil increases.
U.S. West Texas Intermediate futures fell to around $76 per barrel on Thursday. Prices moved below $80 per barrel on Monday for the first time in months. While oil prices are tumble from recent highs, energy costs will likely remain high for the immediate future as shippers continue to watch for developments or whether the U.S.-Iran deal will hold. Meanwhile, refineries that depend on oil transported through the Strait of Hormuz will likely need time to resume production.
U.S. energy names fell on the news, with Exxon Mobil (XOM) stock plunging more than 4% on Monday, The stock tumbled 6.3% for the week to 137.81, just above its 200-day moving average. XOM stock has been trending lower since early April as a U.S.-Iran ceasefire got underway.
Still, institutional buyers are still likely to give Exxon stock some support. "In our model, the billion dollar funds were buying Exxon, they're buying Valero, they're buying (chemical company) Corteva," Scott Bennett, founder of Invest with Rules and IWR Advisors, told the "Investing with IBD" podcast.
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