Starting to get a small correction in stock pricing.
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In my opinion, both 2obc & 1uup make compelling statements. Very interesting analysis.
The total value of all stocks not just Chevron has become dangerously detached from the state of the economy. The long term average of the market-to-GDP ratio is around 75. Right now it is currently 110. A severe contraction of the market will happen. Therefore preserve capital by all accounts as a brutal recession is on its way, 2008 x2.
1kev - You may be correct, Sir. As I said,... I've been wrong, before. The point I attempted to make, albeit, in a rather ineloquent fashion, was: The M.E. is a powder keg, at the moment, and several "fuses" are burning, as we speak. The two, most likely to be aggressive, powers, Iran and Russia, depend heavily upon revenues from oil, which the Saudis have managed to trash. I have never believed Russian military forces went into Syria JUST to prop up the Assad regime, and they've certainly met with no resistance, from Obama, on ANYTHING (the sanctions apparently haven't stopped them). So,... with their best "window of opportunity" (Obama's last year in office) about to close, 2016 could be most interesting.
@1umf, I agree with your general explanation but would stop short in saying there will be a "sharp increase in oil prices". There might be an eventual rise in the price of oil, but no short term "sharp" increase.
The market looks at a company's future cash flows, debt levels, etc. to gauge current worth. Start-up of Gorgon is a plus, and if Wheatstone stays on schedule, another plus. Obviously, current stock prices imply expected increases in crude prices, but they do NOT (yet) reflect prevailing and possible geopolitical events. To ME, it looks like a devil's brew of Greed + Fear + Desperation + Opportunity = Sharp Increase In Crude Prices. Timing, is uncertain. But,... I've been wrong, before.
$.99 a gallon
@ctk, for the average blue collar working man that you are, your recollection of Chevron's stock prices in relation to today's dividend of $1.07 tells me you are well attuned to financial matters. Don't sell yourself short. Your observations are very valid ones.
The last time oil was at $30 was 2003 and chevron stock was $36 back then. I would say it's going to correct some. The only difference now is the dividine is more per share but still I would guess it should be in the $50's with the $60's being the high side. But I am not an investment banker just a blue collar working man, so what do I know. How about we borrow some more money and build a few stories on top of this house of cards
CVX has bounced back a bit last week to $85, but went down on Friday to $83. I agree it seems higher than it should be. It hasn't been that long ago when it hit rock bottom at $69. The price of oil was higher then also. I feel strongly CVX will be heading back down into the mid to low 70s if oil prices don't rise to $33 by the end of January.