Through TheFLY's Eyes: Chevron and Devon
A Sizeable Oil Find, But Not A Global Equation Changer
The initial consensus among energy analysts regarding Chevron (CVX) and Devon Energy’s (DVN) find of new oil in the Gulf Of Mexico’s deep waters is that it represents a positive data for the companies and for the global supply of oil, but it does not change the secular trend in oil markets.
Strong demand globally, particularly from the rapidly-growing Asian markets of China and India, has put upward pressure on oil prices for more than three years. Barring a global recession, this trend is likely to continue for the foreseeable future. Oil currently trades at about $68.50 per barrel.
Analysts note that the new CVX / DVN find holds 3B-15B barrels worth of oil and gas reserves – sizable but not large enough to substantially alter the global supply/demand equation. Devon soared $8.78 to $72.93 and Chevron was up $1.95 to $66.81 on the news in Tuesday afternoon trading.