What Happened?
Shares of integrated energy company Chevron (NYSE: CVX) jumped 3.6% in the afternoon session after crude oil prices surged amid escalating conflict in the Middle East, while the company also benefited from a strategic asset sale and a vote of confidence from a major investor.
The price of Brent crude, the international benchmark, and West Texas Intermediate both soared as a result of a U.S.-Israel war with Iran, which boosted profit prospects for Texas oil companies. Adding to the positive developments, Chevron announced an agreement to sell its interests in two offshore blocks in Angola for a base price of $260 million. Furthermore, filings showed that Warren Buffett's Berkshire Hathaway recently added over 8 million shares of Chevron to its holdings. The combination of these factors helped push the stock to a new all-time high during the session.
After the initial pop the shares cooled down to $197.83, up 3.1% from previous close.
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What Is The Market Telling Us
Chevron’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Chevron is up 26.9% since the beginning of the year, and at $197.83 per share, has set a new 52-week high. Investors who bought $1,000 worth of Chevron’s shares 5 years ago would now be looking at an investment worth $1,773.
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