Chevron shares set to fall after Q2 loss and sinking oil prices
The US-based oil and gas major is likely to see its shares close out the week in the red after recording a $8.3 billion loss in its second quarter, while oil prices slide with no sign of global demand improving due to Covid-19.
![Chevron](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/news-article-image-folder/bg oil brent wti crude 23948239487.jpg/jcr:content/renditions/original-size.webp)
Chevron is likely to see its shares close out the week in the red after recording a $8.3 billion loss in its second quarter (Q2), as oil prices slide with no sign of global demand improving due to Covid-19.
Brent crude fell as much as 5% to $41.38 on Thursday, with it managing to find stable footing a touch above $43 a barrel on Friday, with investors worried that demand may not return this year as a second surge in new cases emerges in Europe.
Meanwhile, the US West Texas Intermediate (WTI) fell as much as 6% yesterday, with the benchmark dipping below the psychological $40 level briefly. WTI is trading at $40.34 a barrel at the time of publication.
Chevron shares could fall further after poor Q2 performance
Chevron delivered a disappointing set of Q2 results on Friday, with the oil and gas major reporting a multi-billion loss due to asset write-downs as a result of plummeting oil prices, as well as its involuntary exit from Venezuela.
Asset write-downs have become a common theme among oil and gas companies during the Covid-19 pandemic, with demand weak and oil markets wrestling with oversupply.
As a consequence, interest in renewables has surged in recent months, helping to accelerate the energy transition away from fossil fuels, with oil and gas majors like BP and Shell opting to write-off billions in oil and gas assets. In fact, BP and Shell have slashed the value of their assets by a combined total of $39.5 billion.
‘The past few months have presented unique challenges,’ ‘Given the uncertainties associated with economic recovery, and ample oil and gas supplies, we made a downward revision to our commodity price outlook which resulted in asset impairments and other charges,’ Chevron CEO and chairman Michael Wirth said.
‘While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results may continue to be depressed into the third quarter 2020,’ he added.
WTI looks to recover from sharp drop
After holding above $40.50 for most of the past two weeks, yesterday the WTI price dived to its lowest level in three weeks, briefly moving below $39, according to Chris Beauchamp, chief market analyst at IG.
‘We have seen a modest rebound, but with the price now below $40.50 and below trendline resistance from last Thursday’s highs bulls will need a recovery back above $41.30 to revive the outlook for higher prices,’ he said.
‘A rally that turns lower from below $41.00 will be a lower high and thus a potential selling opportunity,’ Beauchamp added.
![WTI](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/content-2-chart-images/31.07WTI_310720.png)
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