Exxon Mobil will continue expansion drive despite oil volatility
Exxon Mobil will keep pursuing its current strategy of investing in new oil exploration, despite prices of the resource falling.
The oil giant will pour money into shale gas, of which the US is the world’s largest producer, and new oil fields.
This comes as doubts rise about global demand for oil following the outbreak of cornavirus.
Exxon is “playing the long game” said analyst Anish Kapadia of Palissy Advisors.
The company is banking on competitors under investing and Exxon’s profits therefore rising with commodity prices.
“However, this is not a strategy that investors are going to buy in to today as they are more focused on where commodity prices are at currently.
“There is a fear in the market that global demand for hydrocarbons will stagnate or fall,” Kapadia added.
Oil, which last week reached a low of $50 a barrel, is also facing uncertainty from the drive for clean energy.
Sign up to City PM’s Midday Update newsletter, delivered to your inbox every lunchtime
De-carbonisation is now a major area of investor focus .
However, Exxon chief Darren Woods has said “the longer term horizon is more clear” with regard to oil demand.
His prediction is based on the assumption of demand being driven by rising global living standards.
Last night, Exxon shares on Wall Street were down 5.21 per cent.