Investors scored on Iran war's oil market boom. Staying long the trade will get trickier
Oil price volatility caused by U.S.-Iran war created big market winners, but for buy-and-hold investors, there are better long-term energy themes to monitor.
Investors profited significantly from the U.S.-Iran war's impact on the oil market this past week, with ExxonMobil and Chevron reporting remarkable quarterly profits. Exxon's profits doubled to $14.5 billion year-over-year, while Chevron's net income increased by nearly 400%. U.S. crude oil futures averaged over $92 in April-June, a 27% increase. Valero Energy's earnings jumped over 400% for the quarter, and Chevron's refining segment saw profits surge 500% due to gasoline and diesel price hikes.
However, staying long on this trade could become increasingly challenging. Oil prices have been volatile, with a barrel peaking at nearly $120 and dipping to $72 since early March. President Trump has expressed optimism about an end to the war, but as of Friday, U.S. crude was trading under $85 per barrel, down more than 5% in the past week.
Investing experts suggest that the recent gains may be due to short-term speculation rather than long-term fundamental analysis. ETFs specializing in oil and refining have seen significant returns, with USO up 87% year-to-date and BBO up 78.1%. However, long-term investors may find volatility in the market too difficult to navigate.
Written by urgent.news from CNBC World's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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