Oil Majors Expect Gains Despite WTI Range

The quarter ended before the effect of the latest OPEC+ production cuts, but major oil companies could still see substantial gains even with crude prices trading sideways.

ExxonMobil Might Raise Dividend

World's biggest oil producer is expected to report declining earnings of $2.60 on slightly lower sales of $85.6B. Higher costs are seen impacting the refining margin. But, there is speculation that the company could double down on its policy of returning profits to shareholders and once again raise its dividend. At the last earnings, Exxon pledged to return $35B to investors this year through buybacks and dividends, with investors keen to see if this program still remains in place as oil prices have been sliding since the end of the quarter.

Chevron Guidance Risk Remains

Chevron has already given the "good news" previously in the year, raising its share buyback program to $17.5B and increasing production by 3%. Chevron stands out as putting more money into production development and already increased its capital expenditure. Investors are likely to be focused on whether the company can stick to its guidance as crude prices have declined. Earnings are expected to decline to $3.40 on lower revenues of $48.6B.

ConocoPhillips Focus on Willow Cost

Ahead of earnings already, ConocoPhillips disclosed its long-term plans for what to do with profits during its Investor Day presentation. That includes distributing over 90% of its market cap over the next ten years and cutting debt by $5B by 2026. The company is also set to develop the controversial Alaska Willow project, expecting its first production by 2029. Given the cost of the program, investors will likely be interested to see if there is any change in the plan to return $11B to investors. Earnings are expected to drop to $2.06 on $15.8B in sales.

Shell LNG Numbers will Matter

Shell Issued a trading update earlier in the month, providing updated guidance for the rest of the year. The company said it saw increased LNG volumes this year and affirmed its guidance for production being around flat compared to last year. According to estimates from analysts compiled by Vara for Shell, it is expected that Shell will report $15.3B in free cash flow. Earnings are expected to decline to $2.09 on $78.0B in sales.

Conoco Most Down YTD Compared to Peers

ConocoPhillips has a little bit of a catch-up to do, trading 14% in the red YTD, behind all peers. Notably, it was trading at $20/shr back in 2020 and managed to soar to triple digits last year. However, it might lose $100 if earnings disappoint, with $93 as a last resort for short-term bearishness above $78. $110 is short-term resistance bulls must recapture for further upside. $126 and $138/shr might act as resistances as we move up.

Structurally, ConocoPhillips might be printing a running triangle, suggesting a symmetrical consolidation pattern may be due, leading to further upside after completion. If so, the next wave up could end near $128, mirroring the depth of the first downward leg to $93. Triangles contain five waves though, with the next leg following the upward move being down, but likely the bottom too.

KEY TAKEAWAYS

Major oil companies are expected to report declining earnings but still see substantial gains despite crude prices trading sideways. ExxonMobil is speculated to double down on its policy of returning profits to shareholders, while Chevron has already given "good news" by raising its share buyback program and increasing production. ConocoPhillips disclosed its long-term plans for profits, distributing over 90% of its market cap over the next ten years and cutting debt by $5B. Shell issued a trading update, expecting to report $15.3B in free cash flow. ConocoPhillips has some catch-up to do, though, trading 14% in the red YTD, behind all peers. It might lose $100 if earnings disappoint, with $93 as a last resort for short-term bearishness and $110 as short-term resistance bulls must recapture for further upside.