Why ExxonMobil Shares Are Falling Today

Actions of ExxonMobil (NYSE: XOM) they fell this morning and were down 3.1% at 11:50 a.m. ET Tuesday, erasing all and some of the previous day’s gains. While oil and gas stocks typically reflect crude oil price movements, there’s another reason ExxonMobil was lower today.

Oil price volatility is weighing on investor sentiment

Crude oil prices fell on Tuesday morning after OPEC cut its forecast for global oil demand for 2024 to about 2 million barrels per day (BPD), or about 80,000 BPD lower than its previous forecast. OPEC also revised its forecast for oil demand to 2025. Brent crude, the global oil price benchmark, fell more than 3% this morning and fell below the $70 mark to a low that I haven’t seen him in over a year. As one of the world’s largest oil producers, ExxonMobil’s revenue and cash flows will be affected when oil prices fall.

Meanwhile, ExxonMobil has reportedly pulled out of a bid to buy a stake in a promising oil discovery in Namibia, according to Reuters. ExxonMobil is among several global oil and gas giants eyeing a piece Galp Energyhis asset. Galp owns an 80% stake in an oil block in the Orange Basin, a region where several large oil discoveries have been reported in recent years.

What should you do with ExxonMobil stock now?

On the one hand, OPEC oil demand is weakening. On the other hand, speculation is rife that OPEC+ producers are likely to increase production in the coming months. The two factors combined could continue to put pressure on oil prices and therefore on ExxonMobil shares.

However, the last thing you should do right now is panic sell ExxonMobil stock. ExxonMobil has weathered some of the worst oil storms in its roughly 135 years of existence and built a fortress of a balance sheet. The oil giant has increased its dividend for 41 consecutive years and should still be able to give you a bigger dividend this year and beyond, even as oil prices continue to fall. In fact, ExxonMobil is a solid dividend stock to buy on all dips.

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Neha Chamaria has no position in any of the shares mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why ExxonMobil Stock Is Slipping Today was originally published by The Motley Fool