Oil price is currently trading around the highest level in the past 52 weeks, with expectations that economic recovery will fuel more growth in the days ahead. China, the world’s largest oil consumer, expects double-digit economic growth in the first quarter. Simultaneously, vaccination in the European region and the United States is likely to boost economic numbers in 2021. Traders and analysts have close been watching the cyclical change in the energy market. Morgan Stanley has also adjusted its price target and outlook for top oil players.
Favors Exxon over Chevron
Morgan Stanley analysts led by Devin McDermott favors Exxon (NYSE: XOM) over Chevron (NYSE: CVX) due to several factors, including spending cuts and margins. The firm has provided a price target of $57 to Exxon, with equal weight ratings. Exxon shares are down almost 30% in the last twelve months despite a sharp rally in the past month. Exxon has aggressively been working on selling non-core assets and moving the portfolio focus towards high margin the US plays. The company has generated $46 billion from asset sales between 2010 and 2019, and it expects to sell $3 billion assets every year over the next five years.
