Oil prices fall below $80! Bank of America downgrades Exxon Mobil (XOM.US) rating, while Chevron (CVX.US) receives positive outlook thanks to restructuring

Odaily App noted that as US crude oil futures fell below $80 per barrel, the energy sector declined overall. At the same time, Bank of America downgraded Exxon Mobil (XOM.US) from "Buy" to "Neutral," with a target price set at $158.

Bank of America pointed out that a potential ceasefire in the Middle East could pose downside risk; in addition, since 20% of the company's current production is offline and its outlook in Qatar remains uncertain, the potential upside is limited.

Bank of America analyst Jean Ann Salisbury upgraded Exxon Mobil’s rating in June this year (the day the ceasefire statement was issued). The stock subsequently fell to $140, which she considered a good buying opportunity, implying a long-term oil price expectation below $70 per barrel and viewing the possibility of renewed hostilities as a "free call option."

Salisbury is more optimistic about Chevron (CVX.US), maintaining her "Buy" rating and raising its target price from $210 to $227. She stated that Chevron’s internal restructuring has driven remarkable progress so far this year across several development opportunities: including asset swaps in Venezuela, the Argentina RIGI (Regime for the Incentive of Large Investments) application, signing a memorandum of understanding with Iraq on the West Qurna project, winning the bid for the Sirte basin in Libya, and ongoing exploration in Namibia.

Although not all opportunities may ultimately succeed, the analyst said, "It is great to see Chevron restocking its project portfolio; although most investors seemed to believe a year ago that Chevron would need to rely on M&A for sustained growth over the next decade, ‘today its organic growth opportunity set looks much stronger.’"