Oil Companies Deploy Capital Allocation

This is a big week for oil, or more specifically for big oil. By the end of this week Exxon Mobil (XOM), BP (BP), Chevron (CVX), and Royal Dutch Shell (RDS-A) will have reported earnings. The market will then have a good picture of the state of the oil industry today after these Big Four provide results and issue outlooks. 

But an interesting thing is happening to oil stocks, namely the equities of the major producers. A barrel of oil today is at $107, a price where the majors can certainly make plenty of money. But five years ago this week -- as the markets were about to implode -- a barrel of oil hit $147. Since the price of oil weighs heavily on the profitability, and therefore the share price, of oil companies, one would rationally expect that owning oil stocks has been dreadful the past five years. ...262 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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