Exxon Mobil (XOM) Stock: Trump Venezuela Plan Lights Fire Under Shares

TLDR

• Exxon Mobil stock rose 3.2% to $126.55 in premarket trading Monday after news about Venezuela investment opportunities
• U.S. officials told oil companies they need to invest in Venezuela’s oil infrastructure to get compensation for nationalized assets from 20 years ago
• Exxon is seeking $1.65 billion through arbitration for seized assets while ConocoPhillips wants about $12 billion
• President Trump said he will send major American oil firms to Venezuela to rebuild energy operations following Nicolas Maduro’s weekend capture
• Stock gains came even as oil prices dropped with Brent crude falling 0.8% and WTI declining 0.9%

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Exxon Mobil shares gained 3.2% to $126.55 in premarket trading Monday morning. The move followed weekend developments about Venezuela and U.S. oil company involvement in the country.

Exxon Mobil Corporation, XOM

Trading ranged from $126.26 to $127.38 during extended hours. Other major oil stocks including Chevron and ConocoPhillips also posted gains.

Venezuela controls the world’s largest proven oil reserves. Changes in access or U.S. sanctions policy can reshape supply forecasts and recovery prospects for companies with outstanding claims against Caracas.

The Venezuela issue for Exxon goes beyond production volumes. Reuters reported U.S. officials told oil executives they must invest capital to fix Venezuela’s deteriorated oil infrastructure if they want repayment for assets taken decades ago.

These claims stem from Venezuela’s nationalization of foreign oil operations. The companies have pursued compensation through arbitration rather than traditional court systems.

ConocoPhillips is chasing approximately $12 billion for its nationalized assets. Exxon’s claim totals $1.65 billion according to Reuters reporting.

Trump Outlines Venezuela Plans

U.S. forces captured Venezuelan President Nicolas Maduro on Saturday in a military operation. Trump addressed the situation at a press conference from his Mar-a-Lago property.

The president said he plans to send large U.S. oil companies to Venezuela. They will work on rebuilding the country’s energy sector and receive reimbursement for the work.

Trump described Venezuela’s oil operations as a “bust” for many years. Production had fallen to a fraction of the country’s potential output, he noted.

Venezuela produces less than 1% of global oil supplies today. The country still holds some of the planet’s biggest crude reserves despite the low current output.

Francisco Monaldi weighed in on the potential investments. He said Exxon, ConocoPhillips and Chevron won’t hesitate to work with Venezuela’s heavy crude from the Orinoco Belt.

Oil Prices Move Lower

Crude prices declined as Exxon shares climbed. Brent crude dropped 0.8% to $60.26 per barrel during the session.

West Texas Intermediate fell 0.9% to $56.79. High global supply levels countered any price support from Venezuela uncertainty.

Exxon finished Friday at $122.65 after hitting an intraday peak of $122.68. Monday’s premarket trading pushed the stock past that previous high.

The stock’s 52-week range spans from $97.80 to $122.68. The premarket price exceeded the top of that range.

Market watchers are tracking whether Exxon can maintain levels above $122.68. That price point can create selling pressure when shares first break through.

The U.S. embargo on Venezuelan oil stays in effect for now. Rebuilding Venezuela’s production capacity would require years and billions in capital.

Bloomberg reported that Chevron currently handles about 20% of Venezuela’s oil output. Exxon and ConocoPhillips stopped operating in the country after Hugo Chavez nationalized their holdings.

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