Shares of Exxon Mobil Corporation retreated during Friday's trading session, highlighting investor caution around the energy giant's long-term growth projects and a jittery crude market. The stock declined $3.94, or 2.6%, to $147.03 by late morning, after touching an intraday low of $147.01. This drop notably underperformed the broader S&P 500, which was modestly higher, and stood out among major oil peers.
Guyana Gas Development in Focus
The decline coincided with ongoing scrutiny of Exxon's ambitious development plans in the Stabroek Block off the coast of Guyana. Guyana's Natural Resources Minister, Vickram Bharrat, stated that the company is still conducting evaluations to determine the precise scale of natural gas resources in the block. "Exxon still needs to do more work to evaluate the amount of resources there," Bharrat noted. This assessment is crucial for sanctioning the next phase of gas development, which reportedly could involve a second floating production, storage, and offloading (FPSO) vessel and a potential pipeline to the Berbice region.
While this gas work continues, Exxon received positive updates on its concurrent oil projects in the region. The Uaru and Whiptail developments are reportedly progressing ahead of schedule and under budget. Each project is expected to have a production capacity of 250,000 barrels per day, with Uaru slated to begin operations in 2026 and Whiptail in 2027.
Broader Market and Commodity Context
The stock-specific news unfolded against a backdrop of elevated but nervous energy markets. Crude oil prices held near six-month highs, supported by a significant drawdown in U.S. inventories. Data from the Energy Information Administration (EIA) showed crude stocks fell by 9 million barrels to 419.8 million barrels for the week ended February 13. However, the market tone remained uncertain heading into the weekend. Ole Hansen, head of commodity strategy at Saxo Bank, observed, "The market is nervous, it's going to be a wait-and-see day."
Exxon is often viewed by traders as a liquid proxy for broad energy sector risk. The recent movement in crude, driven by geopolitical factors and supply expectations, has prompted swift rotations in and out of energy equities. The potential for a fading geopolitical risk premium or an acceleration in new supply poses a downside risk to prices, which would likely pressure stocks like Exxon.
Peer Performance and Investor Watchpoints
The sell-off was not isolated to Exxon. The broader cohort of oil majors traded lower, though Exxon's decline was the most pronounced. Chevron shares fell 1.2%, ConocoPhillips lost 1.3%, and U.S.-listed shares of Shell declined approximately 1.4%. The Vanguard Energy ETF (VDE) slipped 1.1%, contrasting with a 0.4% gain for the SPDR S&P 500 ETF.
Investors are also parsing Exxon's recently filed annual report on Form 10-K, dated February 18, for deeper insights into project risks and capital allocation plans beyond quarterly earnings headlines.
Looking Ahead
Market participants are setting their sights on several near-term catalysts. The next weekly petroleum status report from the EIA is scheduled for release on Wednesday, February 25, at 10:30 a.m. Eastern Time. Furthermore, Exxon management is expected to provide commentary during a fireside chat at the Morgan Stanley conference on March 3, at 11:00 a.m. ET.
The core challenge for Exxon's Guyana gas ambitions remains the alignment of long-term industrial demand onshore with the timely sanctioning of necessary infrastructure. Any delays could push out future cash flows. For now, the combination of project-specific uncertainty and a volatile commodity price environment is weighing on investor sentiment toward one of the world's largest energy companies.
