<ul><li><keyword id="46107" type="CITY" weightage="60" keywordseo="Exxon-Mobil">Exxon Mobil</keyword> tumbled as much as 6%, to $47.29, on Friday following a<a href="https://www.wsj.com/articles/exxon-draws-sec-probe-over-permian-basin-asset-valuation-11610716622"> report from the Wall Street Journal</a> that the SEC launched an investigation into the oil giant regarding its valuations of one of its most important oil and gas properties.</li><li>People involved in valuing the property complained that employees were forced to use unrealistic assumptions about how quickly Exxon could drill wells there to arrive at a higher value, the Journal reported. </li><li>The investigation comes after Exxon's stock suffered its worst annual performance in 40 years in 2020 as oil prices collapsed. </li><li><a href="https://markets.businessinsider.com/stocks/xom-stock">Watch Exxon Mobil trade live here</a>. </li></ul>Shares of <a href="https://markets.businessinsider.com/stocks/xom-stock">Exxon Mobil</a> tumbled as much as 6% during intraday trading on Friday following <a href="https://www.wsj.com/articles/exxon-draws-sec-probe-over-permian-basin-asset-valuation-11610716622">a report from the Wall Street Journal</a> that the SEC launched an investigation into the oil giant concerning it's asset valuations.Exxon is being investigated by the SEC after a whistleblower complaint from an employee who alleges that the oil giant overvalued a key oil and gas property in Texas' Permian Basin. Several people involved in valuing the asset complained during a 2019 internal assessment that employees were being forced to use unrealistic assumptions about how quickly Exxon could drill wells there to arrive at a higher value, the Journal reported, citing a copy of the complaint.The current status of the <keyword id="9486955" type="UNKNOWN" weightage="60" keywordseo="sec-investigation">SEC investigation</keyword> is unknown. The investigation comes after Exxon's stock suffered its worst annual performance in 40 years in 2020 as oil prices collapsed. Shares of Exxon fell to as low as $47.29 shortly after the Friday opening bell. Exxon had notched a positive start to 2021 before Friday's sell-off. As of Thursday's closing price, it was up 22 % since the start of the year. The stock has now tumbled roughly 27% over the past 12 months.Read more: <a href="https://www.businessinsider.com/stock-picks-to-buy-battery-lithium-suppliers-tesla-electric-vehicles-2021-1">Global X's lithium and battery ETF returned 126% in 2020 as electric vehicle-driven demand surged. One of the firm's analysts shared 4 stocks he sees 'leading the rise' in the industry going forward.</a>

Exxon slides 6% after SEC launches investigation into the oil giant's asset valuations

<ul><li><a href="https://markets.businessinsider.com/stocks/xom-stock">ExxonMobil</a> shares slid as much as 2.6% on Friday after the firm posted its first quarterly loss in 32 years.</li><li>The energy company is among the most exposed to oil's recent price plunge and the coronavirus' impact to demand for the commodity.</li><li>The pandemic has placed "unprecedented pressure" on margins, CEO Darren Woods said.</li><li><keyword id="6383208" type="ORGANIZATION" weightage="60" keywordseo="exxon">Exxon</keyword> slashed spending plans in early April by roughly $10 billion to protect its quarterly dividend and balance sheet amid the oil market turbulence.</li><li><a href="https://markets.businessinsider.com/stocks/xom-stock">Watch ExxonMobil trade live here</a>.</li></ul><a href="https://markets.businessinsider.com/stocks/xom-stock">ExxonMobil</a> announced first-quarter earnings on Friday that slipped below analysts' breakeven forecasts and detailed the firm's hit from recent oil-price pressure.The energy giant said the coronavirus' impact on oil demand prompted its first quarterly loss in 32 years and will remain a significant drag on performance. Revenue landed above analyst forecasts for the quarter.Exxon shares slipped as much as 2.6% early Friday on the news.Here are the key numbers:Revenue: $56.2 billion, versus the $51.9 billion estimateEarnings per share (GAAP): -14 cents versus the breakeven estimate, 55 cents in the year-ago periodRead more: <a href="https://www.businessinsider.com/investing-advice-strategy-how-to-play-portfolio-defense-from-aqr-2020-4">Quant megafund AQR explains why investors should be more worried about prolonged slumps than virus-style crashes — and details a 3-part process for protecting against them</a>"COVID-19 has significantly impacted near-term demand, resulting in oversupplied <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> and unprecedented pressure on commodity prices and margins," CEO Darren Woods said in the report. "Economic activity will return, and populations and standards of living will increase, which will in turn drive demand for our products and a recovery of the industry."Exxon was among the companies most impacted by <a href="https://markets.businessinsider.com/commodities/oil-price?type=wti">West Texas Intermediate crude's</a> slide to negative prices on April 20. WTI contracts for June delivery leaped 7.5% to $19.95 per barrel on Friday, continuing a rally through the week from their late-April lows.The company cut 2020 spending by 30%, or roughly $10 billion, on April 7 to protect its balance sheet and quarterly dividend. Exxon plans to pay an 87 cent-per-share dividend in the second quarter, according to its Friday report.Exxon closed at $46.32 per share Thursday, down about 33% year-to-date.The company has three "buy" ratings, 18 "hold" ratings, and seven "sell" ratings from analysts, according to Bloomberg data.Now read more markets coverage from Markets Insider and Business Insider:<a href="https://markets.businessinsider.com/news/stocks/boeing-debt-demand-surging-first-quarter-loss-787-max-coronavirus-2020-4-1029152147">Investors are clamoring for new Boeing debt after the company's $641 million first-quarter loss, report says</a><a href="https://www.businessinsider.com/federal-reserve-expands-main-street-lending-program-coronavirus-relief-stimulus-2020-4">The Fed expands its $600 billion lending program for struggling businesses but leaves start date unannounced</a><a href="https://www.businessinsider.com/coronavirus-recession-crisis-outlook-how-to-invest-david-rosenberg-2020-4">Famed economist David Rosenberg nailed the housing crash. Now he explains why this crisis won't end as quickly as it began, and shares an investing strategy for the next 3 years and beyond.</a><a href="https://markets.businessinsider.com/stocks/xom-stock"><div type="image" title="XOM" height="698" width="942" msid="75493077" hostid="261"></div></a>Read the original article on <a href="https://www.businessinsider.com/exxonmobil-q1-earnings-first-loss-decades-oil-market-price-plunge-2020-5">Business Insider</a>

ExxonMobil tumbles after oil-market chaos drives first quarterly earnings loss since 1988

<ul><li><keyword id="583923" type="PERSON" weightage="60" keywordseo="energy-stocks">Energy stocks</keyword> jumped on Tuesday, sending the S&amp;P 500 Energy Sector Index up more than 6%, the best performance of any group in the index. </li><li><keyword id="6359072" type="UNKNOWN" weightage="60" keywordseo="oil">Oil</keyword> prices hit their highest levels since March on Tuesday, supporting energy company stocks. </li><li>Here's how much a group of energy company stocks jumped during intraday trading Tuesday. </li><li><a href="https://www.businessinsider.com/">Read more on Business Insider</a>.</li></ul>Energy stocks jumped on Tuesday, sending the S&amp;P 500 Energy Sector Index up more than 6%, the best performance of any group in the S&amp;P 500 index. Shares of energy companies gained amid rising oil prices, which on Tuesday hit their <a href="https://markets.businessinsider.com/news/stocks/oil-price-highest-march-eu-stimulus-coronavirus-economic-hopes-wti-2020-7-1029414952">highest levels since March</a> as investor optimism for a solid economic recovery grows. <a href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">West Texas Intermediate crude</a> gained as much as 3.9% to $42.40 per barrel. <a href="https://markets.businessinsider.com/commodities/oil-price?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">Brent crude</a>, the international benchmark, rose 3.7%, to $44.89 per barrel, at intraday highs.The commodity faced a rocky start to the year. In March, a price war broke out between Saudi Arabia and Russia, pushing oil lower. Then, the coronavirus pandemic hit, cratering demand and further weighing down prices. Read more: <a href="https://www.businessinsider.com/investing-advice-coronavirus-recovery-trades-with-huge-upside-margaret-vitrano-2020-7">A $47 billion fund manager shares 3 trades she's making for huge upside as the economy recovers — including a play on the Tesla-led boom of electric vehicles</a>Now, oil prices are rising as economic reopening efforts are spurring expectations of boosted demand in the future, and energy stocks are gaining as well.Here's how much a group of key energy companies gained on Tuesday. <ul><li><keyword id="533802" type="COMPANY" weightage="60" keywordseo="Occidental">Occidental</keyword> (<a href="https://markets.businessinsider.com/stocks/oxy-stock">OXY</a>) — as much as 15% </li><li>Apache Corp. (<a href="https://markets.businessinsider.com/stocks/apa-stock">APA</a>) — as much as 12% </li><li>Devon Energy Corp. (<a href="https://markets.businessinsider.com/stocks/dvn-stock">DVN</a>) — as much as 13% </li><li>Halliburton (<a href="https://markets.businessinsider.com/stocks/hal-stock">HAL</a>) — as much as 11% </li><li>Chevron Corp. (<a href="https://markets.businessinsider.com/stocks/cvx-stock">CVX</a>) — as much as 7%</li><li>Exxon Mobile (<a href="https://markets.businessinsider.com/stocks/xom-stock">XOM</a>) — as much as 6% </li></ul>

Energy stocks surge as oil hits a 4-month high

<ul class="summary-list"><li>The “sin stocks” label traditionally refers to <keyword id="6366684" type="UNKNOWN" weightage="60" keywordseo="gambling">gambling</keyword>, alcohol, tobacco, and weapons companies.</li><li><keyword id="4461046" type="PERSON" weightage="60" keywordseo="Sin-stocks">Sin stocks</keyword> are considered <keyword id="597098" type="PERSON" weightage="60" keywordseo="defensive-stocks">defensive stocks</keyword>, meaning they tend to perform well even during an economic downturn.</li><li>Though relatively stable, sin stocks carry some special risks, such as being vulnerable to changes in regulations or taxes. </li></ul>Sin stocks refer to shares of public companies engaged in a business or industry that's considered unethical, immoral, or unsavory. Traditionally, the term's been applied to the weapons, alcohol, gambling, or tobacco sectors. But, with the growth of <keyword id="6617678" type="UNKNOWN" weightage="60" keywordseo="Socially-responsible-investing">socially responsible investing</keyword> and <keyword id="9884660" type="UNKNOWN" weightage="60" keywordseo="ethical-investing">ethical investing</keyword>, sin stocks now often encompass other companies and industries people find objectionable in some way.Some investors shun sin stocks and try to own only investments they consider virtuous or ethical. Other investors favor sin stocks because they tend to perform well in both <a href="https://www.businessinsider.com/what-is-a-bull-market" target="_blank" rel="noopener">bull</a> and bear stock markets, and no matter what <a href="https://www.businessinsider.com/what-is-business-cycle" target="_blank" rel="noopener">phase</a> the economy is in. Let's fall more deeply into sin stocks. <h2>What is a sin stock?</h2>No single standard industry definition exists for sin stocks. But most of the categories could be said to tie into any of the seven deadly sins laid out centuries ago by Pope Gregory I: <ol><li>Pride</li><li>Greed</li><li>Lust</li><li>Envy</li><li>Gluttony</li><li>Wrath</li><li>Sloth</li></ol>It's easy enough to plug most of the sin stock categories into this ancient list: Gluttony could refer to alcohol and <keyword id="2433809" type="PERSON" weightage="60" keywordseo="Tobacco-stocks">tobacco stocks</keyword>, wrath could refer to weapons stocks, and greed could refer to gambling stocks. Adult entertainment companies can also fall under the umbrella of sin stocks, and they fit nicely into the lust category.<h2>Is sin in the eye of the beholder?</h2>Other stocks and sectors can be considered sinful too — depending on your religion, your politics, and your personal moral and ethical values. For example, Islamic investors, following their faith's Shariah law, might shun conventional financial institutions because they charge interest. Shariah principles also prohibit investments in alcohol, tobacco, pork, gambling, media, and pornography and disallow short selling, speculation, and derivatives.Environmentalists might classify oil and coal stocks as sin stocks, considering the companies behind them to be "polluters." Vegans might consider shares of any company that raises animals, sells animal products, or tests on animals to be a sin stock. Some analysts even make a solid argument for Netflix as a sin stock: to binge-watch a show is to indulge in sloth. And if alcohol is sinful, maybe marijuana is, too, if it's being used for recreational and not medicinal purposes. The stock of a company that produces opiates could be considered a sin stock because of all the people who have died or become addicted — though of course, these drugs have enormous benefits too. Even the generally agreed-upon categories can be open to debate. What one person calls a weapons company (unethical) another person might deem a defense company (ethical). Such is the double-edged sword of trying to define what makes a stock sinful.<h2>Sin stock categories and companies</h2>A variety of corporations could be called sin players. The categories include the traditional Big Four of the sin stock sector, along with some newer but commonly cited fields. <ul><li>Alcohol: Anheuser-Busch InBev (BUD), Molson Coors Brewing Company (MCBC), Boston Beer Company (SAM), Constellation Brands (STZ), Diageo (DGEAF), Brown-Forman (BF)</li><li>Defense/Weapons: Boeing (BA), Northrup Gruman (NOC), Aerojet Rocketdyne (AJRD), Raytheon (RTX), Lockheed Martin (LMT), American Outdoor Brands (AOBC), Olin (OLN), Vista Outdoor (VSTO), Sturm, Ruger (RGR)</li><li>Tobacco: Altria (MO), British American Tobacco (BTAFF), Philip Morris (PM)</li><li>Gambling/Adult Entertainment: Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN), Penn National Gaming (PENN), Caesars Entertainment (CZR), Boyd Gaming (BYD), Scientific Games (SGMS), DraftKings (DKNG), RCI Hospitality Holdings (RICK)</li><li>Marijuana/Cannabis: Cronos (CRON), Canopy Growth (CGC), Aurora Cannabis (ACB), Aphria (APHA), Tilray (TLRY), GrowGeneration (GRWG)</li><li>Corrections/Prisons: CoreCivic (CXW), The GEO Group (GEO)</li><li>Payday Lenders: World Acceptance Corp. (WRLD), Enova International (ENVA)</li><li>Energy: Energy Transfer LP (ETP), ExxonMobil (XOM), Kinder Morgan (KMI)</li><li>Meat: Hormel Foods (HRL), Sanderson Farms (SAFM), Tyson Foods (TSN)</li><li>Snacks/Junk Food: Coca-Cola (KO), Mondelez International (MDLZ), Hershey (HSY), PepsiCo (PEP), McDonald's (MCD)</li></ul><h2>What makes sin stocks enticing?</h2>You don't invest in sin stocks just for the thrill of being naughty. Owning them can be an attractive financial strategy. <h3>They're steady performers</h3>Sin stocks are considered "defensive" stocks, meaning they tend to perform well even during an economic downturn or <a href="https://www.businessinsider.com/what-is-a-recession" target="_blank" rel="noopener">recession</a>. People who regularly smoke, drink, or gamble don't stop doing these things when times are bad, whether because they're physically addicted or because they enjoy these activities as a way to escape and unwind, however un healthfully. And of course, they might indulge even more when times are good. <h3>They're cash cows</h3>As a result, sin stocks are known for their stable earnings and income streams. Many companies in sin industries are well-established, have sound financials, and have consistently paid dividends for years. <h3>They've got little competition</h3>The goods and services that sinful companies produce tend to be highly subject to law. Potential competitors may be loath to enter such enterprises, creating more room for the existing players.Even sin stocks' negative connotations can work to their advantage. Certain institutional investors — especially those handling funds for religious or academic groups — often shy away from notorious or controversial businesses. That can lead to a particular sin stock being undervalued and a good bargain.<h2>What are the downsides of sin stocks?</h2>Even if you have no moral or ethical qualms about investing in sin stocks, you should consider their potential financial drawbacks before adding them to your portfolio.<h3>There's high regulatory risk</h3>All companies' fortunes can be contingent on laws, but regulatory risk is a particular concern with sin stocks. Marijuana might become legal at the federal level, but what happens if, instead, U.S. states reverse the legality of medical or recreational marijuana? Defense spending and gun control regulations can change depending on who rules a country, international relations, and terrorist activity.<h3>Taxes can be a problem</h3>All companies have to deal with taxation, but sin stocks often have a fiscal target on their backs. Regulators and voters could decide to increase taxes on the "sinful" items these companies produce; they're often the go-to source when states need money. Higher taxes could reduce demand, dampen profits, and push stock prices down.<h3>Consumer habits can change</h3>You'll also want to consider the effect of changing consumer tastes, like declining alcohol and tobacco consumption. Black swan events can force habits to change, such as a pandemic shutting down casinos and the sporting events people like to bet on.Finally, devoting too much of your portfolio to a single industry or company is always risky, no matter whether that company produces organic vegetables or nuclear warheads.<h2>How to invest in sin stocks </h2>The unique consideration for sin stocks is whether you oppose the product or service a company manufactures or purveyors. Otherwise, whether you should invest in sin stocks boils down to the same questions you would ask yourself with any investment: <ul><li>What is the unique benefit of putting my money in this investment versus a different investment? </li><li>Is the potential reward high enough to choose this investment over the alternatives?</li><li>How does this investment fit into my portfolio and my overall investment strategy?</li><li>How much money do I stand to lose? Can I afford that loss?</li></ul>Of course, as with any investment, you'll have to do the research on any possible sin stock you're considering to make sure the conventional wisdom about it holds true.<h2>The financial takeaway</h2>In a sense, the decision to invest in stocks question touches on the general issue of socially responsible and ethical investing — and whether you feel that your principles should influence your principal.Some investors' attitude toward sin stocks is that it's up to individuals to decide whether they want to smoke, drink, or gamble, despite the risks. Other investors think that the companies producing these products are at least partly to blame for individuals' consumption, especially when that consumption becomes addictive and products are engineered to be addictive. It's up to you whether to base your investment decisions purely on financial considerations or whether to let the ethical questions inform your choices. <h2>Related Coverage in <a href="https://www.businessinsider.com/investing-reference" target="_blank" rel="noopener">Investing</a>:</h2><h3><a href="https://www.businessinsider.com/personal-finance/why-invest-stock-market" target="_blank" rel="noopener">Why invest in the stock market? Because it can be more dangerous not to</a></h3><h3><a href="https://www.businessinsider.com/personal-finance/how-to-invest-in-stocks-beginners-guide" target="_blank" rel="noopener">How to invest in stocks, even if you're starting from scratch</a></h3><h3><a href="https://www.businessinsider.com/online-poker-casino-games-business-triple-as-casinos-close-2020-8" target="_blank" rel="noopener">Online poker and casino games have tripled their revenue from last year as real-world casinos shut their doors</a></h3><h3><a href="https://www.businessinsider.com/us-cannabis-execs-say-industry-is-heading-for-a-turnaround-2020-9" target="_blank" rel="noopener">Insider Cannabis: US cannabis execs say the industry is heading for a turnaround — Compass Pathways going public — Cannabis users prefer regular old weed</a></h3><h3><a href="https://www.businessinsider.com/pentagon-upholds-microsoft-jedi-contract-amazon-lawsuit-2020-9" target="_blank" rel="noopener">In a blow to Amazon, the Pentagon has upheld its $10 billion JEDI contract with Microsoft</a></h3>

Sin stocks are shares in companies whose business can be considered unethical — here's why they're so enticing and the major players

<ul><li>Despite a big down year for stocks, a handful of names managed to print huge gains in 2022.</li><li>Oil stocks dominated the S&amp;P 500's top 10 winners this year as commodity prices spiked.</li><li>These are the index's 10 best performing stocks in 2022, which added a combined $357 billion in market value.</li></ul><hr />2022 was a tough year for most stock market investors, with the <a href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> finishing the year down 20% as inflation and higher interest rates dragged down investor sentiment.But there were still some big winners in 2022, mainly in the energy sector as higher commodity prices sparked by <a href="https://www.businessinsider.com/putin-has-no-plan-in-ukraine-according-to-inner-circle-report-2022-12">Russia's war against Ukraine</a> led to record profits for oil companies like <a href="https://markets.businessinsider.com/stocks/xom-stock">Exxon Mobil</a> and others.One investor who won big was billionaire Warren Buffett, as his Berkshire Hathaway <a href="https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-analysis-occidental-petroleum-energy-oil-stock-2022-7">built a substantial stake throughout 2022 in the S&amp;P 500's best performer:</a> <a href="https://markets.businessinsider.com/stocks/oxy-stock">Occidental Petroleum.</a> Buffett also owns a stake in <a href="https://markets.businessinsider.com/stocks/cvx-stock">Chevron</a>, which was the 17th best S&amp;P 500 performer in 2022 with a gain of about 50%.The energy sector finished the year up 56%, making it the only one to print positive gains for the year. Meanwhile, about 70% of S&amp;P 500 companies logged negative returns, making it all the more impressive for energy stocks to post such massive gains.Combined, the top 10 performing S&amp;P 500 stocks in 2022 added a total of $357 billion in market value. That pales in comparison to <a href="https://markets.businessinsider.com/news/stocks/worst-performing-stocks-meta-tesla-tech-inflation-economy-sp500-2022-12">the $1.6 trillion in market value erased by the S&amp;P 500's top 10 losers,</a> which included <a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a>, <a href="https://markets.businessinsider.com/stocks/meta-stock">Meta Platforms</a>, and <a href="https://markets.businessinsider.com/stocks/pypl-stock">PayPal</a>, among others.These were the 10 top performing S&amp;P 500 companies in 2022.10. Valero Energy<div type="image" title="FILE PHOTO: A Valero Energy Corp. gas station is pictured in El Cajon, California, U.S., August 8, 2017. REUTERS/Mike Blake/File Photo" height="3190" width="6380" msid="96649342" hostid="261" sizebytes="412176"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/vlo-stock">VLO</a> 2022 Return: 68.1% Market Value Gained: $18.1 billion9. Halliburton<div type="image" title="Oil pumps at sunset, industrial oil pumps equipment." height="1993" width="3986" msid="96649346" hostid="261" sizebytes="103848"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/hal-stock">HAL</a> 2022 Return: 70.0% Market Value Gained: $15.0 billion8. First Solar <div type="image" title="solar panel" height="1750" width="3500" msid="96649349" hostid="261" sizebytes="370148"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/fslr-stock">FSLR</a> 2022 Return: 70.7% Market Value Gained: $6.4 billion7. APA<div type="image" title="oil pumps drill" height="731" width="1462" msid="96649352" hostid="261" sizebytes="177500"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/apa-stock">APA</a> 2022 Return: 70.7% Market Value Gained: $5.6 billion6. Schlumberger<div type="image" title="FILE PHOTO - The exterior of a Schlumberger Corporation building is pictured in West Houston January 16, 2015. REUTERS/Richard Carson " height="1750" width="3500" msid="96649357" hostid="261" sizebytes="606410"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/slb-stock">SLB</a> 2022 Return: 76.7% Market Value Gained: $33.5 billion5. Exxon Mobil<div type="image" title="Exxon Mobil gas station" height="2894" width="5789" msid="96649359" hostid="261" sizebytes="427284"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/xom-stock">XOM</a> 2022 Return: 78.5% Market Value Gained: $192.8 billion4. Marathon Petroleum<div type="image" title=" Marathon gas station on May 22, 2014 in Chicago, Illinois" height="1000" width="2000" msid="96649363" hostid="261" sizebytes="339906"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/mpc-stock">MPC</a> 2022 Return: 81.6% Market Value Gained: $20.8 billion3. Hess <div type="image" title="Customers wait in line for fuel at a Hess gas station in Brooklyn, New York November 9, 2012. REUTERS/Brendan McDermid" height="400" width="800" msid="96649366" hostid="261" sizebytes="40920"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/hes-stock">HES</a> 2022 Return: 90.3% Market Value Gained: $20.6 billion2. Constellation Energy <div type="image" title="nuclear power plant" height="512" width="1024" msid="96649369" hostid="261" sizebytes="17588"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/ceg-stock">CEG</a> 2022 Return: 106.6% Market Value Gained: $14.2 billion1. Occidental Petroleum<div type="image" title="occidental petroleum" height="1750" width="3500" msid="96649372" hostid="261" sizebytes="279190"></div>Ticker: <a href="https://markets.businessinsider.com/stocks/oxy-stock">OXY</a> 2022 Return: 114.8% Market Value Gained: $29.8 billion

The 10 biggest winners in the S&P 500 this year were led by an oil giant Warren Buffett owns. The top stocks saw a combined $357 billion increase in market value.

<ul class="summary-list"><li><keyword id="60772" type="CITY" weightage="60" keywordseo="Chevron">Chevron</keyword> has overtaken <keyword id="6383208" type="ORGANIZATION" weightage="60" keywordseo="exxon">Exxon</keyword> in market value. </li><li>Exxon was the largest company in the world seven years ago. </li><li>Chevron's market value has also fallen substantially in the last year, driven down largely by the collapse in <keyword id="6359072" type="UNKNOWN" weightage="60" keywordseo="oil">oil</keyword> prices. </li><li>A number of events pushed down Exxon's stock including reporting two consecutive quarters of loss and getting booted from the Dow Jones Industrial Average. </li></ul>Chevron surpassed Exxon in market value Wednesday, becoming the largest oil company by market cap in the US. This is the first time Chevron has been in the top spot since at least 1980, according to Bloomberg data.The milestone is more about Exxon's decline than it is about Chevron's ascent, because the entire oil industry has been battered by a fall in crude prices sparked by the coronavirus pandemic.Exxon's market value has fallen more than 50% since the start of the year, settling at $141.6 billion at market close Wednesday. Chevron's value is down about 39% to $142.0 billion. Meanwhile, the broader S&amp;P 500 has risen almost 6% in the same period. Exxon's stock has faced pressure from a number of events including its ousting from the Dow Jones Industrial Average in August and two consecutive quarters of loss. The company also has a high dividend yield, signaling that it may be forced to cut its prized payout in the coming weeks."Dividend sustainability remains top of mind at XOM," Goldman Sachs analysts said in a late-September note, "with mixed views on how the company will ultimately move forward on the dividend." <div type="image" title="Exxon's market value" height="432" width="845" msid="78544330" hostid="261"></div>While Chevron has faced similar challenges — it reported an $8.3 billion loss in the second quarter — <a href="https://www.woodmac.com/news/opinion/which-supermajors-portfolios-are-most-resilient/">some analysts</a> consider it a more resilient pick when oil is cheap. Chevron also has a stronger balance sheet than Exxon, according to a note published in early September by Goldman Sachs. Chevron's stock also got a boost when the company announced in July it would acquire gas-producer Noble <keyword id="6357014" type="ORGANIZATION" weightage="60" keywordseo="energy">Energy</keyword>.<a href="http://newsletter.businessinsider.com/join/4np/power-line">Click here to subscribe to Insider Energy</a>, Business Insider's weekly energy newsletter.The energy sector has <a href="https://www.cnbc.com/2020/09/30/energy-markets-worst-performing-sector-may-be-due-for-some-upside.html">underperformed every other industry</a> in the S&amp;P 500 this year, forced down by a collapse in oil prices in March. The price of Brent crude, the international benchmark, is down about 36% from the start of the year. Do you have information concerning Exxon or Chevron? Send tips to this reporter at <a href="mailto:bjones@businessinsider.com">bjones@businessinsider.com</a> or through Signal/text at 1-646-768-1657.<h2 style="text-align: left;">Exxon was once the world's largest company</h2>Seven years ago, Exxon was the largest company in the world by market value. It was worth almost half a trillion dollars by mid-2014 when oil was trading above $100 a barrel. Exxon's financial losses are tied to the recent collapse of oil markets. Plus, investor interest in fossil fuel companies at large is waning. <a href="https://www.businessinsider.com/bank-of-america-oil-stock-picks-to-buy-energy-markets-2020-8">In an August report,</a> Bank of America said there's a "cocktail of disincentives" to own oil stocks, including a focus among investors on sustainability.<div type="image" title="Exxon Mobil gas station" height="3855" width="5141" msid="78541678" hostid="261"></div>Relative to its rivals, Exxon has also taken on a massive amount of debt to grow oil production and cover its dividend, the <a href="https://www.wsj.com/articles/exxon-used-to-be-americas-most-valuable-company-what-happened-oil-gas-11600037243">Wall Street Journal reported</a>. The company spent more than $260 billion on capital expenditures between 2009 and 2019, The Journal said, and added $45 billion in debt. Investors are now rewarding companies that are disciplined with their capital, <a href="https://www.businessinsider.com/bank-of-america-oil-stock-picks-to-buy-energy-markets-2020-8">Bank of America said</a>. Goldman Sachs, which favors Chevron (CVX), said in late September that it has "expectations that CVX will implement strong capital discipline."After Exxon was cut from the 30-company Dow, Chevron was the only oil stock to remain.This story was updated with the share price at market close.

Chevron just overtook Exxon to become the most valuable oil company in the US

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5b747e862154a37f5f8b4e08-2400/gettyimages-80991382.jpg" border="0" alt="Oil Price" data-mce-source="Justin Sullivan/Getty Images" data-mce-caption="AN FRANCISCO - MAY 5: Gas prices are displayed at a Shell station May 5, 2008 in San Francisco, California. U.S. gas prices have shot up nearly fifteen cents in the past two weeks, bringing the national average price for a gallon of regular unleaded gasoline to $3.62. Gasoline prices have surged 55 cents since January 1, 2008" />Justin Sullivan/Getty ImagesGas prices are displayed at a Shell station, 2008 in San Francisco, California.</div></div></div><ul class="summary-list"><li><a href="https://markets.businessinsider.com/commodities/oil-price">Brent</a> crude oil rebounded above $63 a barrel on Wednesday following a report that showed an unexpected decline in US supplies.</li><li>Crude on Tuesday hit its <a href="https://markets.businessinsider.com/commodities/news/oil-prices-drop-to-fresh-one-year-lows-2018-11-1027743858">lowest level since 2017</a> after President Donald Trump signaled the US would not punish Saudi Arabia over the killing of Washington Post journalist Jamal Khashoggi in its Istanbul consulate.</li><li>Oil prices have rallied this year as market watchers expect that US sanctions on Iran will reduce oil supplies.</li><li>But prices have eased by nearly a quarter from recent peaks amid OPEC's downgrades on global oil demand and as Trump allows eight countries to temporary import Iran's oil despite sanctions.</li></ul>Energy stocks are rallying as <a href="https://markets.businessinsider.com/commodities/oil-price">crude oil</a> rebounds on Wednesday following a report that noted an unexpected decline in US supplies.The American Petroleum Institute (API) reported late Tuesday that <a href="https://uk.reuters.com/article/uk-global-oil/oil-bounces-above-63-after-slide-but-glut-worries-persist-idUKKCN1NQ027">US crude inventories</a> fell by 1.5 million barrels to 439.2 million barrels for the week through November 16, according to Reuters. The news eased near-term concerns about an oil-supply glut, sending crude prices above $63 a barrel on Wednesday and recovering some of the previous session's 6% plunge.As a result, energy stocks are gaining around. Here's the scoreboard as of 9:40 a.m. ET:<ul><li><a href="https://markets.businessinsider.com/stocks/mro-stock">Marathon Oil </a>(MRO) +2.13%</li><li><a href="https://markets.businessinsider.com/stocks/slb-stock">Schlumberger</a> (SLB) +1.39%</li><li><a href="https://markets.businessinsider.com/stocks/bhi-stock">Baker Hughes</a> (BHI) +1.38%</li><li><a href="https://markets.businessinsider.com/stocks/cpk-stock">Chesapeake Utilities</a> (CPK) +1.13%</li><li><a href="https://markets.businessinsider.com/stocks/cvx-stock?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Chevron Corporation</a> (CVX)+1.18%</li><li><a href="https://markets.businessinsider.com/stocks/xom-stock?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">ExxonMobil</a> (XOM) +0.75%</li></ul>Crude's Wednesday surge came one day after it hit its <a href="https://markets.businessinsider.com/commodities/news/oil-prices-drop-to-fresh-one-year-lows-2018-11-1027743858">lowest level since 2017</a>, touching an intraday low of $62.56 a barrel. The sell-off intensified following a statement by President Donald Trump that signaled the US would not punish Saudi Arabia, the world's largest oil exporter, over the killing of Washington Post journalist Jamal Khashoggi in its Istanbul consulate.Trump said the US would stand by the kingdom even after the <a href="https://www.nytimes.com/2018/11/16/us/politics/cia-saudi-crown-prince-khashoggi.html" target="_blank" rel="noopener">CIA concluded</a> Saudi Crown Prince Mohammed bin Salman ordered the killing of Khashoggi. Oil prices have rallied this year as market watchers expect that US sanctions on Iran, OPEC's third-largest oil producer, will reduce oil supplies. Brent crude reached a four-year high of $86.74 a barrel.But prices have eased by nearly a quarter from recent peaks after OPEC last month downgraded its <a href="https://www.reuters.com/article/us-oil-opec-report/opec-cuts-forecast-for-global-oil-demand-growth-in-2019-idUSKCN1ML1KR" target="_blank" rel="noopener">global demand forecast</a> for a third straight month amid concerns about the prospect of slowing economic activity around the world, and as Trump administration earlier this month said it will allow eight countries - China, India Turkey, South Korea, Italy, Greece, Japan and Taiwan - to temporary import Iran's oil despite sanction.<h2>Now read:</h2><ul><li><a href="https://markets.businessinsider.com/commodities/news/oil-prices-drop-to-fresh-one-year-lows-2018-11-1027743858">Oil extends sharp losses after Trump signals US won't punish Saudi Arabia after Khashoggi killing</a></li><li><a href="https://markets.businessinsider.com/commodities/news/oil-price-stocks-fall-as-opec-sees-abundant-supply-2018-10-1027610758">Energy stocks get whacked after OPEC says oil is 'well supplied'</a></li></ul> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/what-happens-inside-your-nose-when-it-runs-2016-8">Why your nose runs when it's cold outside</a></h3> <div> <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/ydJzGrrD-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script> </div> </div>

Energy stocks are rallying as crude oil rebounds

<a href="https://www.businessinsider.com/master-your-money" target="_blank" rel="noopener"></a><div type="image" title="A businesswoman looking off to the side with a mobile phone in her hand." height="600" width="1200" msid="87787483" hostid="261"></div>Table of Contents: Masthead Sticky<ul class="summary-list"><li><keyword id="12169848" type="UNKNOWN" weightage="60" keywordseo="futures-contracts" source="Orion">Futures contracts</keyword> allow traders to speculate on the direction of price movements on asset classes such as livestock, oil, and soybeans.</li><li>Investing in <keyword id="12109007" type="UNKNOWN" weightage="60" keywordseo="futures" source="Orion">futures</keyword> can provide an additional layer of diversification to a portfolio.</li><li>Futures are more complex and carry more risks than trading stocks or ETFs because of low margin requirements and volatility.</li></ul><a href="https://www.businessinsider.com/what-are-futures" target="_blank" rel="noopener">Futures</a> are contracts in which the buyer agrees to buy a commodity or financial instrument at a specified date and quantity at a later point in time, and the seller agrees to sell or deliver the asset as specified in the contract. These contracts were initially created to help businesses navigate unexpected costs.For example, profits in the airline industry can be heavily dependent on the price of fuel. To protect against a sudden surge in prices, an airline company can use a futures contract to lock in current prices, thus nullifying the impact of increasing fuel prices. Futures contracts can be settled in cash or with physical goods. For traders, the settlement is in cash, while some businesses may opt for physical delivery. A futures contract can derive its value from various <a href="https://www.businessinsider.com/what-are-assets" target="_blank" rel="noopener">asset types</a>. The most common types are commodities like wheat, corn, and crude oil. Precious metals like <a href="https://www.businessinsider.com/how-to-buy-gold" target="_blank" rel="noopener">gold</a> and silver, currencies, <a href="https://www.businessinsider.com/treasury-bonds" target="_blank" rel="noopener">US Treasuries</a> and stock indexes like the <a href="https://www.businessinsider.com/what-is-the-sp-500" target="_blank" rel="noopener">S&amp;P 500</a>. But to trade futures, you'll want to understand the risks and investment strategies before moving forward. Here are four key areas that you'll want to get familiar with.Note: Futures are known as <a href="https://www.businessinsider.com/derivative" target="_blank" rel="noopener">derivatives</a>. Derivatives are contracts that obtain their value from an underlying asset, index, or security.<h2>Step 1: Understand how futures work — and the risks </h2>Futures work differently from more mainstream investing options like <a href="https://www.businessinsider.com/how-to-invest-in-stocks" target="_blank" rel="noopener">stocks</a>. Other than <a href="https://www.businessinsider.com/what-is-speculation" target="_blank" rel="noopener">speculation</a>, some investors prefer futures trading because it can offer a few benefits that are not available with stocks. For example, futures contracts trade at <a href="https://www.businessinsider.com/stock-market-hours" target="_blank" rel="noopener">different hours</a> than the stock market. Instead of 9:30 a.m. to 4 p.m. ET, the futures market is open nearly 24 hours a day, six days a week.Another benefit to futures trading are the short-selling requirements and tax benefits. <a href="https://www.businessinsider.com/what-is-short-selling" target="_blank" rel="noopener">Short selling</a> is the process of selling <keyword id="11899862" type="UNKNOWN" weightage="60" keywordseo="assets" source="Orion">assets</keyword> that you've borrowed with the intent on buying it back later for less money. For stocks, short selling has a higher margin requirement but futures contracts have the same <a href="https://www.businessinsider.com/what-is-margin-trading-how-it-works" target="_blank" rel="noopener">margin requirement</a> on long and short positions making it a bit more conducive for traders who are looking for this high-risk, high-reward tactic. As for taxes, some futures trades may qualify for preferential tax rates. "Typically, gains from short-term stock trades are taxed as ordinary income. However, gains from futures contracts are taxed at a 60/40 rate which is 60% long-term and 40% short-term. Currently long-term capital gains tax rates range from 0-20% depending on your federal income tax bracket," says Moswen James, an enrolled agent at Get Help Tax.Futures can also help an investor diversify and participate more directly in certain asset classes. For example, the stock price for a company like Exxon Mobile (XOM) will at-times be dependent upon the price of crude oil because of the nature of the company — and other factors like management and competitors. A futures contract on the other hand can be based directly on the price of crude oil without the added risk factors that a company may bring. That does not mean however that futures contracts are less risky, they are still highly complex financial instruments. One of the largest risk factors with futures is related to the <a href="https://www.businessinsider.com/what-is-margin-trading-how-it-works" target="_blank" rel="noopener">margin</a> requirements and price sensitivity. "Futures contracts are inherently very leveraged because the underlying valuation is very sensitive to the amount of funds invested as margin or collateral," says Chester Spatt, professor of finance at Carnegie Mellon University's Tepper School of Business.Margin is the practice of borrowing money from your brokerage to invest. Current margin requirements for futures contracts are between 3% and 12%. This means an investor could spend $5,000 of their own money to control a $100,000 position, which represents only 5%. If this trade goes in the favor of the investor, there would be a significant windfall. But a negative move could result in serious losses. Before using debt to enter a trade it is wise to carefully consider your risk tolerance. <h2>Step 2: Choose a futures contract type and market to trade in </h2>There are different types of futures contracts to choose from. Because each market can be so distinct from each other, a futures trader typically focuses on one or two areas, similar to how a chef may specialize in baking or desserts. This allows the trader to have a deeper understanding of that market and may help inform their trading decisions. Below are the most common categories. <ul><li>Precious metals: Gold and silver are the most common metals in this category. Investors who choose these types of futures contracts are generally looking to hedge against inflation or financial uncertainty but precious metals can also be used for more practical applications like platinum for semiconductor chips. </li><li>Stock index: These contracts derive their value from a stock index like the S&amp;P 500, Nasdaq, or Dow Jones. Investors try to use these types of futures to profit from anticipated movements or announcements from the Federal Reserve. </li><li>Energy: Futures contracts that are based on energy would include oil and natural gas. These contracts can also serve as a benchmark for oil prices worldwide. </li><li>Agriculture: Agriculture contracts in this category are usually based on things like soybeans, corn and wheat. These contracts are a bit more unique due to the fact that weather patterns and seasonality play a much bigger role in impacting prices and risk. </li><li>US Treasury/interest rates: Futures contracts based on interest rates and Treasury bonds play a significant role in international financial markets. Investors in this category closely watch the moves of the Federal Reserve. </li><li>Livestock: Traders can even speculate on the prices of livestock like cattle and hogs. Price movements here are subject to consumer tastes and supply and demand pressure in addition to standard risks associated with futures.</li></ul>Note: Each type of futures contract is denominated in different values. For example, futures contracts for gold are denominated in 100 troy ounces but wheat contracts are 5,000 bushels.<h2>Step 3: Choose your investing strategy</h2>There are several investing strategies to choose from, typically a trader will become familiar with one or two contract types and specialize in a particular strategy based on their goals, risk tolerance, and comfort level. Common futures trading strategies include going long or short in a position and calendar spreads which could be bullish or bearish. <ul><li>Going long: This means that you are buying the contract and you're expecting the underlying asset to rise. The obvious risks with this strategy occur if the underlying asset drops in value. </li><li>Going short: This strategy involves selling the contract in anticipation that the underlying asset will fall in value. This strategy however is risky because losses can be unlimited should the underlying asset rise in value since there is no true limit to how high prices can rise. </li><li>Calendar spreads: A calendar spread is a strategy in which the trader takes both a long and short position on the same asset but with two separate expirations. The profit is generated by the spread which is the profit between the contract that was sold and the contract that was purchased. In a bull calendar spread, the trader will go long on the shorter expiration date and go short on the contract with the longer expiration. In a bear calendar spread, the positions are flipped and the trader will sell the shorter expiration contract and buy the longer one. </li></ul><h2>Step 4: Place your futures trade and manage it </h2>A best practice for any trade is to understand the risks and price targets prior to entry. Because of the increased risks of trading futures, contracts should be carefully monitored. This is where the different order types to buy and sell may come into play and help manage the trade. A <a href="https://www.businessinsider.com/what-is-a-limit-order" target="_blank" rel="noopener">limit order</a> offers control over the entry and exit prices. If you know the levels in which to enter and exit a trade these limit orders, as well as a <a href="https://www.businessinsider.com/stop-limit-order" target="_blank" rel="noopener">stop loss</a> can help traders execute their strategies more efficiently. <h2>The financial takeaway</h2>Futures trading is not suitable for every investor due to its complexity and risk. "Futures contracts have tremendous price sensitivity compared to the amount that needs to be deposited as margin or collateral. If the investor does not want to close his position after an adverse price move he should have substantial reserves available," adds Spatt.<a data-type="60f732f1f1315a79ff359f2c">What to know about derivatives and how they allow investors to hedge, leverage, and speculate</a><a data-type="5fc82cf036173566ec233b96">Alternative investments are exotic assets that can diversify your portfolio</a><a data-type="5ffe3955c645d76d5d4d4ab5">How to hedge against inflation with investments that keep pace with rising prices</a><a data-type="5fc809a6f45c2344c12b9ab6">Trading and investing are two approaches to playing the stock market that bring their own benefits and risks</a>

A beginner's guide to trading futures contracts

Happy Friday and welcome to Insider <keyword id="6357014" type="ORGANIZATION" weightage="100" keywordseo="energy">Energy</keyword>, a weekly energy newsletter brought to you by Insider. Here's what you need to know:<ul style="text-align: left;"><li>Want to get Insider Energy in your inbox every Friday? <a href="http://newsletter.businessinsider.com/join/4np/insider-energy">Sign up here</a>. </li><li>You can reach me at <a href="mailto:bjones@businessinsider.com">bjones@insider.com</a> and find me <a href="https://twitter.com/BenjiSJones">on Twitter</a>. I welcome feedback and story tips. </li></ul>I'm hosting a <a href="https://www.businessinsider.com/live-event-future-clean-energy-economy-2021-2">live energy roundtable</a> on Monday with execs from Shell, Facebook, and other big firms, you know, in case CERAWeek wasn't enough. It should be great! We'll discuss whether oil giants still deserve their bad reputations, how companies can generate returns as they pivot to renewables, and what tech breakthroughs we need to clean up the grid. And it's just 30 minutes. You can sign up <a href="https://us02web.zoom.us/webinar/register/WN_jWjYlqomSHCeqAEejyu9nQ">here</a>. Anyway, this week was another week. We got a few more details on <keyword id="6383208" type="ORGANIZATION" weightage="60" keywordseo="exxon">Exxon</keyword>'s strategy during the company's investor day Wednesday (though not much of what it announced is new). And the fallout from the Texas storm - now expected to be the <a href="https://www.businessinsider.com/the-texas-winter-storm-could-cost-insurers-over-20-billion-2021-3">most expensive weather event in the state's history</a> - continues to spread. <hr /><div type="image" title="Exxon Mobil's Fife Ethylene Plant in Cowdenbeath, Scotland" height="1995" width="2661" msid="81354663" hostid="261"></div><h2 style="text-align: left;">Exxon is chasing what it calls a $2 trillion carbon-capture opportunity</h2>Once <a href="https://www.wsj.com/articles/exxon-once-a-skeptic-sees-profit-in-capturing-carbon-emissions-11614787892">skeptical</a> of betting big on carbon-capture technology, Exxon says it's ready to go all-in.During an investor presentation Wednesday, Darren Woods said advances in the technology and a "growing market need" have created a unique opportunity for Exxon.<ul style="text-align: left;"><li>That opportunity has a big price tag: Carbon capture will be a <a href="https://www.wsj.com/articles/exxon-once-a-skeptic-sees-profit-in-capturing-carbon-emissions-11614787892">$2 trillion market by 2040</a>, Exxon said. </li><li>Woods also <a href="https://www.nytimes.com/2021/03/03/business/energy-environment/exxon-mobil-darren-woods.html">said this week that the company is supportive</a> of the goal to reach net-zero emissions and commented on <a href="https://www.wsj.com/articles/exxon-adds-two-new-board-members-after-activist-pressure-11614607512">two new board members</a> that the firm <a href="https://corporate.exxonmobil.com/News/Newsroom/News-releases/2021/0301_Michael-Angelakis-and-Jeffrey-Ubben-join-ExxonMobil-board-of-directors">announced</a> Monday. </li></ul>Call and response: The reality is that Exxon had to do something. For months now, investors and activists have been calling on the company to address its enormous carbon footprint at a faster clip. <ul style="text-align: left;"><li>The investors Engine No. 1 and D.E. Shaw, in addition to a coalition of shareholders with $2.5 trillion under management, are among the groups pushing for change.</li></ul>The easy choice: Capturing carbon dioxide and storing it underground is far easier for a company like Exxon than building out renewable energy capabilities, as its European competitors are doing. <ul style="text-align: left;"><li>The company has been doing CCS for decades. And the main use of captured CO2 is <a href="https://www.businessinsider.com/carbon-capture-explainer-technology-limitations?IR=T">to extract more oil out of the ground</a>, anyway. </li><li>The real change is that Exxon is now organizing all of its carbon capture projects - there are 20 in the pipeline, many of which were already under construction before the recent announcements - in a new business called <a href="https://www.businessinsider.com/exxon-launches-business-focused-on-low-emissions-technologies-2021-2">Low Carbon Solutions</a>. </li></ul>Wall Street is happy: After freefalling in 2020, Exxon's <a href="https://markets.businessinsider.com/stocks/xom-stock">stock</a> is up almost 50% from the start of the year, and many of the top Wall Street banks favor the company. <ul style="text-align: left;"><li>"XOM's newly formed Low Carbon Solutions business helps mitigate energy transition uncertainty while also offering new attractive growth options for the company," Morgan Stanley analysts wrote in a note this week. </li><li>Wall Street firms cite not just Exxon's strategy to cut emissions but pared back capital spending and a low breakeven price for oil. </li></ul>Yet challenges remain: Some investors say Exxon's plan to cut emissions and change up its board doesn't go far enough. Experts have also raised questions about the economics of carbon capture technology. <ul style="text-align: left;"><li>"The business as it stands today is underpinned by government support, and this can be shaky over the long term," Peter McNally, an energy expert at Third Bridge Group, said in a comment this week. </li></ul>Meanwhile, morale has collapsed: Exxon had to slash its operations budget last year to stay afloat, which resulted in <a href="https://www.businessinsider.com/exxon-global-cost-cutting-program-layoffs-job-cuts">job cuts</a> that <a href="https://www.businessinsider.com/exxon-mishandled-layoffs-morale-oil-price-collapse-2021-2">several employees described as haphazard</a>. Morale inside the company <a href="https://www.businessinsider.com/exxon-mishandled-layoffs-morale-oil-price-collapse-2021-2">has suffered</a> as a result. <ul style="text-align: left;"><li>Executives were not forthright with employees about the toll the downturn would take on its workforce and, at times, came across as insensitive when they did communicate about job cuts, current and former employees said.</li><li>You can read more about that <a href="https://www.businessinsider.com/exxon-mishandled-layoffs-morale-oil-price-collapse-2021-2">here</a>. </li></ul><hr /><div type="image" title="Power lines are seen on February 19, 2021 in Texas City, Texas" height="1987" width="2650" msid="81354665" hostid="261"></div><h2 style="text-align: left;">The people and companies paying for Texas's grid disaster </h2>Texas's energy industry faces a reckoning after its grid nearly collapsed last month.The latest: Power has been restored, and enviable 70-degree weather is forecast for the weekend, but Texans still face flooded homes and other damage. And they're not the only ones paying the price … <ul style="text-align: left;"><li>The oldest and largest power cooperative in the state, Brazos Electric Power Cooperative, <a href="https://apnews.com/article/brazos-texas-power-company-bankruptcy-7917fc9b3599231463a2435121bb3a1c">is filing for bankruptcy</a> protection. It was hit with $2.1 billion in bills after the storm.</li><li>Bill Magness, CEO of Texas's grid operator ERCOT, was fired by his board this week. Several board members have also resigned. </li><li>DeAnn Walker, chairwoman of the Public Utility Commission of Texas, which oversees ERCOT, resigned this week.</li><li><a href="https://www.businessinsider.com/texas-blackouts-winter-storm-griddy-enormous-electricity-bills-2021-2">Griddy</a>, the company behind most of the big bills many Texans got stuck with, <a href="https://www.businessinsider.com/texas-blackouts-winter-storm-griddy-enormous-electricity-bills-2021-2">was effectively shut down</a> and now faces a state lawsuit alleging it misled customers. On that note … </li></ul>Griddy's rise and fall: The Texas startup <a href="https://www.businessinsider.com/texas-blackouts-winter-storm-griddy-enormous-electricity-bills-2021-2">had big plans to disrupt the state's $21 billion electricity market</a>. Then they backfired. <ul style="text-align: left;"><li>In <a href="https://www.businessinsider.com/texas-blackouts-winter-storm-griddy-enormous-electricity-bills-2021-2">our story this week</a>, we lay out the company's business model, why it failed, and what happens next. </li></ul><hr /><div type="image" title="Sunrun solar installation" height="3279" width="4373" msid="81354668" hostid="261"></div><h2 style="text-align: left;">Meanwhile, the Texas disaster is set to propel <keyword id="1567748" type="COMPANY" weightage="60" keywordseo="Sunrun">Sunrun</keyword> to new heights</h2>Following the widespread blackouts in California, back in 2019, the <keyword id="45681" type="TECHNOLOGY" weightage="60" keywordseo="Solar">solar</keyword> giant Sunrun - which sells rooftop panels and home batteries - began shifting its pitch to customers: Go solar not just to access <keyword id="154273" type="ORGANIZATION" weightage="60" keywordseo="clean-energy">clean energy</keyword> but to power through blackouts. <ul style="text-align: left;"><li>The company even adopted the slogan "Power through." </li></ul>Sunrun <a href="https://www.businessinsider.com/texas-blackouts-sunrun-solar-panels-batteries-install-massive-year-2021-3">sees a massive opportunity in the disruption of centralized power</a>. Blackouts lead to a surge in customer interest, especially for backup batteries. A Texas boost: So it's no surprise that, as we reported this week, the state's recent power crisis is <a href="https://www.businessinsider.com/texas-blackouts-sunrun-solar-panels-batteries-install-massive-year-2021-3">set to drive sales at Sunrun</a>. <ul style="text-align: left;"><li>Traffic on its website shot up 350% in Texas during the storm. </li><li>"Accelerating extreme weather events will continue to drive consumers to choose solar and batteries," Lynn Jurich, the company's CEO, said in a call with investors.</li></ul>A big year: 2021 was already on track to be a massive year for the rooftop solar industry, analysts said. Now it's all but guaranteed. Read more: <a href="https://www.businessinsider.com/texas-blackouts-sunrun-solar-panels-batteries-install-massive-year-2021-3">The Texas blackouts are fueling a massive market for solar energy - and Sunrun is set to cash in</a><hr /><div type="image" title="Rivian Amazon delivery van" height="1666" width="2222" msid="81354673" hostid="261"></div><h2 style="text-align: left;"><keyword id="18635" type="CITY" weightage="60" keywordseo="Amazon">Amazon</keyword> has $2 billion to experiment with all different kinds of climate tech</h2>A world plagued by a pandemic is one that demands lots and lots of packages. And unfortunately, most of them are shipped by planes, trucks, and boats that cough up tons of greenhouse gases. That's a big problem for <a href="https://www.businessinsider.com/amazon-climate-pledge-fund-investment-strategy-tech-hydrogen-electric-cars-2021-3">Amazon</a>, which stares down a pledge to reach net-zero emissions by 2040 across the company. So it's calling on climate-tech startups for help. This week: <a href="https://www.businessinsider.com/amazon-climate-pledge-fund-investment-strategy-tech-hydrogen-electric-cars-2021-3">We talked to the head of Amazon's Climate Pledge Fund</a> - a $2 billion pot of venture capital that it can dish out to startups.<ul style="text-align: left;"><li style="text-align: left;">The company is funding startups developing technologies that will help Amazon cut its emissions. </li><li style="text-align: left;">Matt Peterson <a href="https://www.businessinsider.com/amazon-climate-pledge-fund-investment-strategy-tech-hydrogen-electric-cars-2021-3">laid out</a> which technologies it's after and why Amazon, like so many companies, is so bullish on green hydrogen. </li></ul><hr />That's it! Have a great weekend. - Benji

Exxon chases after a $2 trillion opportunity to capture and bury carbon emissions

<div class="KonaFilter image-container float_right"><div class="image"><img src="http://static1.businessinsider.com/image/52ea43caecad04f928b6b0f4-1077-807/traders-in-front-of-bloomberg-terminal-1.png?maxX=480" border="0" alt="traders in front of bloomberg terminal" width="480" />Margin Call</div></div>Dave Lutz of Stifel, Nicolaus passes along the top topics about which clients are talking about today.
Good Morning! US Futures are meandering along what many hope is the "Floor", the 100dma in the E-minis, as they gain 30bp. Nasdaq Futures fare better on the back of Earnings - adding 40bp, and remain almost 3% above their 100dma. Bear markets close higher than where they opened. Thus far in 2014, the SPX has closed below our opening 12 times, and above 7. Euro markets are slightly red, with the DAX off 30bp (had been off 1%), and some periphery countries nearing unchanged. Over in Asia, The Nikkei was hit for 2.5% on a surging Yen and their Retail Sales print light ahead of heavy data tonight, while China retreated nearly 1% as their PMI printed in contraction, a first in 6 months. Volume is weak in Europe (Selling exhaustion?) and Asia (Some exchanges closed for Holiday) - but of the 26 Global sectors moving overnight, only German Industrials and EU banks are in the green. Banks, Property and Materials stocks the biggest losers. Single Stock movers include FB +13% (#s), FLEX +10% (#s), TWTR +6% (FB #s), GOOG + 3% (Moto Sale). Losers include CTXS -8% (Multiple d/gs), MOS -1% (POT #s). We have over 10% of the S&amp;P reporting today. COP, V, MMM, UPS, XOM, PHM among those this AM, while we see GOOG, AMZN, BRCM tonight. Looking at the EM angst - we have some stability in the countries making headlines this week - with the Brazilian Real jumping against the Dollar and the Rand trending better as well - while Turkey's Lira meanders around unchanged, after testing yesterday's lows in the overnight. Seems the sharks have moved on (for the moment) to Hungary, where their Forint is getting smacked hard this AM (HUFUSD the cross). The US 10YY is slightly higher this AM, but has been rejected from 2.7% several times in the overnight. The strong bid in Bonds coming from Safety, Pension rotation, Asian Demand on Yield Differential, and positioning from heavy shorts. We do have heavy supply today - 2 auctions - $35B in 5's at 11:30, and $29B in 7's at 1. The DXY is higher, making some gains against € and Yen (Nikkei futures unch tho) - causing a headwind for commodities. All eyes remain on the Natty complex, which surged 10% yesterday in a squeeze on expiry of the current contract - as players tried to lock in prices for February with another "Polar Vortex" approaching - the reversal of that stress buying has the March future off 4% early ahead of the Inventory data at 10:30. Both WTI and Brent have a bid, but we are seeing weakness in Metals - primarily industrials, as that China PMI number weighs. Aside from the aforementioned, we get GDP and weekly claims data at 8:30, Pending Home sales for Dec at 10, a small POMO at 11.

A 5-Second Guide To What Traders Are Chatting About Today

By <a href="http://www.econmatters.com/search/label/EconMatters">EconMatters</a>
Exxon Mobil Corp. (XOM), the world’s biggest energy company by market cap, said its 4Q profit rose to a five-year high boosted by its refining arm from growing supplies of cheap U.S. <keyword id="6359072" type="CITY" weightage="60" keywordseo="oil">oil</keyword>. However, <keyword id="6383835" type="COMPANY" weightage="60" keywordseo="Delta">Delta</keyword> Airlines (DAL) can’t tell a similar success story with its newly acquired refinery. 
Delta paid $150 million for <a href="http://www.econmatters.com/2012/05/when-airline-buys-oil-refinery.html">a Phillips 66 refinery</a> in Trainer PA last May aiming to save $300 million a year in future fuel costs. At the time, many analysts see this acquisition as a smart fuel hedge move by Delta. However, as I <a href="http://www.econmatters.com/2012/05/when-airline-buys-oil-refinery.html">previously discussed</a>, since, the actual implementation of this potential fuel cost savings could be quite problematic. 
<div class="image-container" style="width:548px"><div class="image"><img src="http://static2.businessinsider.com/image/510e4abdecad04877b00004e-598-355/picture 9-102.png?maxX=548&amp;maxY=325" border="0" alt="jet fuel, crude oil chart" width="548" height="325" /></div><a href="http://4.bp.blogspot.com/-CNV9a_fexkc/UQxGJ6sPSAI/AAAAAAAAB0U/jz7bYPZQr2U/s1600/Jet+Fuel+Crude.png">IATA</a></div> 
Further Reading – <a href="http://www.econmatters.com/2012/05/when-airline-buys-oil-refinery.html">When An Airline Buys An Oil Refinery</a> During a time when most refiners are reporting good earning numbers as price gain of petroleum products have outpaced stagnant WTI crude prices, Delta reported loss of $63 million at the Trainer refinery in 4Q, and expects more losses of up to $100 million in 1Q 2013. Delta chalked it up to Sandy, the super storm. However, as Platts <a href="http://blogs.platts.com/2013/01/22/delta_trainer/">reported</a> that in a Dec. 2012 investor call, Delta executives said Trainer plant relies on crudes at about $4/b above Brent (The plant is old and relies on expensive imported crude feedstock mostly from Nigeria.) Platts concluded that Delta is most likely selling gasoline and fuel oil (distillate) at a loss based on the current crack spread (to Brent). Gasoline and fuel oil accounts for more than half of Trainer’s production.
Furthermore, according to Platts, “Refining experts who have done computer simulations tell JFI that Trainer economics theoretically only work using a crude slate of distillate-rich crudes such as Nigerian Forcados, which typically trade at a large premium to Brent crude.”Also, there seems to be another indication of troubles in Delta’s vertical-integration strategy of purchasing a refinery as a fuel hedge. The ex-oil-trader-turned-Delta-VP-of-Fuel, Jon Ruggles, left the company quite abruptly late last year. Ruggles, a key person behind the Trainer refinery deal, was hired away from Merrill Lynch less than a year ago to head Delta’s trading operation. Rumor has it that Ruggles' exit from Delta was somehow related to losses at the Trainer plant. 
The latest from Delta executives is that they now expected Trainer to have $280 million in savings in 2013 and refine 80% if the airline's domestic jet fuel requirement. And there could still be hope for Trainer yet as Delta indicated in a recent SEC filing that the company is considering getting the cheaper Bakken crude by railcar. Given that transporting crude by railcar adds about $22 a barrel to the cost of oil, it is hard to imagine the economics could improve much at Trainer with the current Brent premium over WTI at only around $19 a barrel. 
To put it another way, if it were as easy as shipping Bakken oil via railcars, wouldn’t you think ConocoPhillips, who’s only been in the oil business dating back to 1875, would have figured it out long before dumping the Trainer asset? 
Now thinking the worst is over after extensive restructuring and consolidation in the airline sector, most Wall Street analysts have turned optimistic towards the airline industry. Delta Airlines stock has climbed 25% in the past year outperforming the broader Bloomberg United States Airline Index, which includes Delta Airlines. Investment houses like J.P. Morgan already raised Delta’s 1Q 2013 profit estimate, citing lower fuel prices and strong travel demand.
<div class="image-container" style="width:553px"><div class="image"><img src="http://static6.businessinsider.com/image/510e4b2d69bedd755e000012-943-469/picture 10-117.png" border="0" alt="bloomberg chart" width="553" height="275" /></div><a href="http://2.bp.blogspot.com/-g_OpUabqJHo/UQxIxWiRmfI/AAAAAAAAB0c/UBQSswOii9Y/s1600/Bberg+Airline+Index.png">Bloomberg</a></div> 
Further Reading - <a href="http://www.econmatters.com/2013/01/the-market-rally-tells-us-nothing-about.html">The Market Rally Tells Us Nothing About the Economy</a> However, the fact remains that flying is a commodity, and crude oil prices are expected to remain flat at least in the next two years due to subdued economic growth and demand. That means the same major factors that’s been negatively impacting the airline sector -- weak world GDP, high fuel prices and fierce competition– will still be there, at least in 2013 and 2014, with many down side risks such as the euro zone, and Iran. So in general, any increase in airline profitability would be hard-earned from things like efficiency gain and capacity reduction. 
<div class="image-container" style="width:550px"><div class="image"><img src="http://static4.businessinsider.com/image/510e4b90eab8ea3363000006-669-427/picture 11-86.png" border="0" alt="chart " width="550" height="351" /></div><a href="http://www.econmatters.com/2013/02/delta-airlines-got-oil-refinery-math.html?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+EconForecastFullFeed+%28Posts+by+EconMatters+Only+%28Full+Content%29%29">IATA</a></div>
On top of the tough macroeconomics, Delta has one more down side risk than peers – Trainer Refinery. And as if that’s not bad enough already, Delta management projects nonfuel unit costs will increase 6% to 8% for the March quarter and 4% to 6% for fiscal 2013 due to salary increases and Capex. 
IATA, which represents about 80% of global carriers, forecast the average global airline industry profit margins will improve but remain thin at 2.9% in 2013. So it is hard for me to share the same optimism as JPM regarding Delta or even the airline sector as a whole. © <a href="http://www.econmatters.com/" target="_blank">EconMatters</a> All Rights Reserved | <a href="http://www.facebook.com/EconMatters" target="_blank">Facebook</a> | <a href="http://twitter.com/#!/EconMatters" target="_blank">Twitter</a> | <a href="http://feedburner.google.com/fb/a/mailverify?uri=EconForecast" target="_blank">Post Alert</a> | <a href="http://astore.amazon.com/econforecast-20?_encoding=UTF8&amp;node=80" target="_blank">Kindle</a> <a href="http://feeds.feedburner.com/~ff/EconForecastFullFeed?a=4hv11lKIJQA:yrPGDR1gsOI:I9og5sOYxJI"></a> <a href="http://feeds.feedburner.com/~ff/EconForecastFullFeed?a=4hv11lKIJQA:yrPGDR1gsOI:qj6IDK7rITs"></a> <a href="http://feeds.feedburner.com/~ff/EconForecastFullFeed?a=4hv11lKIJQA:yrPGDR1gsOI:yIl2AUoC8zA"></a> <a href="http://feeds.feedburner.com/~ff/EconForecastFullFeed?a=4hv11lKIJQA:yrPGDR1gsOI:bcOpcFrp8Mo"></a>
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