To The Moon

$Exxon Mobil(XOM)$ $Chevron(CVX)$ $Vanguard Energy ETF(VDE)$ 🛢️📈🔥 Oil Giants on the Brink: Can $XOM and $CVX Outperform Amid Tariffs and Trade Realignments? 🔥📈🛢️

🎯 Executive Summary:

I’m extremely confident that the upcoming earnings for Chevron ($CVX) and ExxonMobil ($XOM) will serve as a referendum on the energy sector’s resilience amid volatile macro conditions and a fresh wave of geopolitical realignment. With the Trump–EU trade agreement greenlighting 15% tariffs and redirecting $750B in energy trade toward the U.S., fossil fuel majors are suddenly sitting atop one of the most strategically favored sectors in 2025. Meanwhile, oil demand continues to surge past 104.4M barrels per day globally, with supply chain leverage tilting toward low-cost producers like Chevron and Exxon. Chevron’s Guyana production through the Hess acquisition and Exxon’s $165B surplus cash projection through 2030 set the stage for a structural rerating of the sector. I believe oil is quietly becoming one of the smartest long-term plays of the decade.

💰 Financial Performance Breakdown:

Chevron is forecasting an additional $9–$10B in free cash flow next year from long-cycle offshore completions in Kazakhstan and the Gulf of Mexico, with $1B in annual cost synergies from its recent Hess acquisition. It has increased dividends for 38 consecutive years and aims to sustain $10B–$20B in annual buybacks. Exxon is projecting $20B earnings growth and $30B in free cash flow by 2030. It plans to invest $140B across Guyana, LNG, Permian, and product solutions, targeting over 30% IRR across projects. These are not just earnings snapshots; they are decade-spanning strategic blueprints.

🛠️ Strategic Headwinds & Execution Risk:

I am aware that long-term fossil fuel projections still battle regulatory opposition. However, that narrative is shifting. The Trump administration’s intent to revoke scientific findings on climate policy, coupled with relaxed environmental enforcement, is fostering tailwinds for oil majors. China’s defiance on Russian oil imports and Venezuela’s reentry via a restricted U.S. Chevron license are reshaping energy diplomacy. Execution risk lies in maintaining CAPEX discipline while navigating global regulatory fragmentation, but Chevron and Exxon’s multibillion-dollar margin buffers and capital recycling strategies reduce operational fragility.

🧠 Analyst & Institutional Sentiment:

Wall Street sentiment is cautiously bullish. Barclays maintains Overweight on $CVX, citing its “free cash flow juggernaut,” while Morgan Stanley’s $XOM target remains at $128, backed by its structural cost advantage and diversified asset base. $XOM’s dividend growth streak (42 years) and $20B annual repurchase target are attracting institutional yield-seekers. $CVX is now back in focus among XLE and VDE ETF reallocations. Market makers are watching this week’s earnings for confirmation of structural breakout patterns.

📉📈 Technical Setup:

$XOM closed inside the 50-day EMA three days ago, still locked in a descending channel within a broader 2-year horizontal range. Weekly RSI is 56, MACD is grinding upward, and price is hovering just below major descending resistance. Until a breakout confirms, it remains in chop. But if it clears the upper trendline, a momentum shift is in play. The 200-week EMA is solid support at 101.43.

$CVX, on the other hand, has already broken its descending resistance trendline and sits near the 0.786 Fibonacci level at 155.08, trading just under 157.03. MACD is bullish on the 4H chart with price staying above the Keltner midband. RSI has been trending higher with support from multiple EMAs (13, 21, 55). A retest of 161.35 (Fib 1.0) remains on deck as a key breakout target.

🌍 Macro & Peer Context:

Global crude consumption hit 104.4M barrels/day in June 2025, setting record highs and showing no sign of plateauing. Despite the energy transition narrative, fossil fuels remain the backbone of industrial power, mobility, and geopolitics. OPEC nations like Venezuela (303B barrels) and Saudi Arabia (267B barrels) still control the lion’s share of proven reserves, yet it is the U.S., backed by Chevron and Exxon, that’s seizing market share as EU demand pivots westward.

Tariffs are reshaping flows. Trump’s $750B energy pact with the EU and potential 15% tariffs on Chinese imports flip the energy map in favor of U.S. producers. Meanwhile, Democrats face criticism for draining U.S. reserves and selling to China, a stark political contrast that’s increasing the appeal of domestic energy equities.

📊 Valuation & Capital Health:

Chevron and Exxon trade at discounted forward EV/EBITDA multiples relative to S&P 500 peers despite their superior free cash flow visibility. Exxon’s PEG ratio is among the lowest in the sector, supported by $165B projected surplus cash and $7B in cost savings. Chevron’s strong dividend coverage, balance sheet discipline, and low breakeven costs position it as a high-yield, low-volatility compounder. Both are capital return machines with strategic expansion paths and upside to current PTs.

⚖️ Verdict & Trade Plan:

I’m placing $CVX in active swing consideration. Ideal entry remains in the $152–$155 range with a stop at $149. Base target is $161.35, stretch target is $172.55 (Fib 1.382). A confirmation would be a breakout with volume above 157.

For $XOM, I’m neutral to cautiously bullish. A decisive breakout above the descending channel could trigger upside toward $120 and eventually $130. Watch for volume confirmation and MACD acceleration. Otherwise, this remains a range-trade until conviction returns.

🏁 Conclusion:

This isn’t just about oil earnings. It’s about a geopolitical reset where energy flows, capital returns, and fiscal policy collide. Chevron and Exxon are no longer just defensive dividend plays; they’re strategic fulcrums in a world scrambling for energy independence. With structural free cash flow growth, tariff tailwinds, and multiyear investment roadmaps, I’m not just looking at the next quarter, I’m seeing a rerating narrative in motion.

📌 Key Takeaways:

• Chevron projects $9–$10B FCF growth next year; targets $10B–$20B in annual buybacks

• Exxon targeting $165B in surplus cash by 2030; 30% IRR on major projects

• RSI: $XOM at 56 (weekly), $CVX trending bullish; MACD up on both

• $CVX breakout confirmed above descending trendline; targets: $161.35–$172.55

• Trump–EU $750B deal and 15% tariffs are major energy tailwinds

• China, Russia, Venezuela reshaping global energy dynamics; U.S. poised to benefit

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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