Chevron stock price jumps as oil prices bounce back

Shares of Chevron (NYSE:CVX) have surged 3% today as oil prices continue a sharp rebound following a collapse on Monday and Tuesday. 

Fundamental analysis: Chevron stock jumps, ignores a row with Trump

Chevron stock price has surged higher despite an order from President Trump to halt oil production in Venezuela. In a bid to increase the pressure on Venezuela’s regime, President Trump signed an order yesterday instructing numerous oil companies, including Chevron, to "wind down" its operation in Venezuela by December 1.

Trump’s decision is likely to have a limited impact on Chevron’s earnings as less than 2% of total oil production is generated from Venezuela. 

The Treasury Department previously allowed Chevron to keep production activities alive in Venezuela, but has now decided to revert that decision. Although the order tells Chevron to wind down its oil production in the troubled country, it doesn’t necessarily ask Chevron to leave the country.

Chevron has historical ties with Venezuela, dating back to 1921. It is estimated that Chevron’s workforce in Venezuela numbers around 8,000 people as a part of five onshore and offshore production projects.

Technical analysis: Stock price jumps on oil prices recovery

Oil prices (the June contract) are trading around 20% higher today, following a 19% jump yesterday. This rebound has helped shares of oil-focused companies, such as Chevron, to trade around 3% higher today. 

Chevron stock price printed a 14-year low in March amid the collapse in global demand for oil. However, the buyers have managed to recover around half of the earlier losses in the past few weeks. As long as shares of Chevron trade above $70, the base is set for a more meaningful recovery. 

The next target on the upside is $98, although any bigger move higher is highly dependent on the oil market prices. 

Summary

Shares of Chevron have jumped today as oil prices (the June contract) are on the way to register the second consecutive day with large gains. Chevron stock price ignored the order from Trump to stop oil production in Venezuela due to the limited impact on the company’s global business.