Exxon Rally Continues Following Q2 Earnings

Exxon Shares Following Earnings Report

Shares in Exxon Mobile are trading higher by 2.89% pre-market on Wednesday. Price is enjoying a firm 8% rally following the company’s Q2 earnings report at the end of last week.

Exxon reported better than expected losses per share of -$0.26 versus expectations of a -$0.61 EPS.

The oil giant posted overall losses of $1.1 billion during Q2 as a result of the “global oversupply and COVID-19 related demand impacts”.

The oil market saw significant declines during the height of crisis, amplified by the price war between Russia and Saudi Arabia, which has caused heavy losses for many energy firms.

Exxon reported revenues of $32.61 billion. This marks a significant decline of more than half when compared with the same quarter last year.

Significant Impact From COVID

In a statement released alongside the earnings call Exxon CEO Darren Woods said:

“The global pandemic and oversupply conditions significantly impacted our second-quarter financial results with lower prices, margins, and sales volumes.”

Woods went on to say:

“We have increased debt to a level we feel is appropriate to provide liquidity, given market uncertainties. Based on current projections, we do not plan to take on any additional debt.”

Exxon noted that oil-equivalent production was lower by 7% year over year. Average prices for crude and gas were also “significantly lower” year on year.

A statement released ahead of the earnings report noted that there are no plans to reduce the company’s dividend for Q3, which is scheduled at $0.87.

Exxon Holding At Key Support Level

Exxon shares have rallied off the 40.87 level support once again following a subsequent test of the level last week. This support zone has been a level for Exxon shares since early May.

While it remains in place, a further move to the upside is still likely. There is plenty of technical confluence overhead offering resistance, however, with the 46.89 level and the bearish long-term trend line.

Bulls will need to see a breach of this level to encourage broader upside momentum for a reversal to develop.