WTI Crude Oil
Chevron share price has taken a hit this afternoon after the company released its earnings report showing a loss of 8.3 billion dollars. Low oil prices and asset write-downs have hit the company’s finances. The company also incurred losses due to severance pay for 6700 staff who were laid off as part of a restructuring process.
US sanctions against Venezuela forced the company to close down its operations in that country, and a demand drop-off from the impact of the coronavirus pandemic also contributed to what has turned out to be a tough business year for the US oil giant.
Details of the earnings call show that Chevron incurred a loss per share of $1.59, which was worse than the $2.27 the company earned a year ago for the same period in view. The loss was also far worse than the $0.92 per share loss that analysts had expected. Revenues fell to $13.49 billion, down from the $36.32 billion the company earned in the same period under review a year ago. This number was also lower than the $22.097 billion that was forecast by analysts.
Chevron share price is down more than 3.56% in premarket, losing $3.07 t0 $83.20. Chevron stock price is therefore primed for a lower open this Friday.
Yesterday’s daily candle for Chevron stocks indicates that the price action has broken below the rising wedge pattern. This breakdown found support at the 86.27 price level. However, with the price already trading below this level in premarket, I expect today’s candle to extend below this area with a downside gap when the market opens. This would set the Chevron stock price on the way to the support located at 82.67 (lows of 22 April and 9 July). A breakdown below this support targets the 78.48 price level, especially if crude oil prices extend their slide of yesterday.
On the flip side, a bounce on the 82.67 support could allow for a retest of 86.27. It would take a substantial fundamental influence to get prices to recover as far as 91.65 or possibly 95.53. With the current fundamental position, any rallies may be seen as opportunities for sellers. The bias is bearish, given the fundamentals and the technical setup.
