These 2 blue-chip energy stocks surged on Wednesday despite the market falling

Investors resumed a bit of fear on Wednesday, although the major stock indexes ended the day well off their lows. Nevertheless, modest declines for the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P500 (SNP INDEX: ^GSPC)and Nasdaq Compound (NASDAQ INDEX: ^IXIC) showed that the market is unlikely to go straight up from here. Bond yields also rose, reversing the trend and reminding investors that the bear market is not over yet.


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Energy stocks got a boost on Wednesday as oil prices rose around $1.50 a barrel to end above the $88 mark. Of particular note are the gains of blue chip energy companies ExxonMobil (NYSE: XOM) and Schlumberger (NYSE: SLB)each of which had encouraging news that made the shareholders happy.

ExxonMobil takes a step forward

ExxonMobil shares rose 4% on Wednesday. The company benefited from an OPEC decision to cut production in an effort to support crude oil prices, but investors were mostly pleased with comments the company made in disclosures filed with the Securities and United States Exchange Commission (SEC).

ExxonMobil has been at pains to clarify that its third quarter financial report will not be as strong as its performance in the second quarter of 2022. As energy investors are well aware, the recent sharp drop in oil prices Gross will have a substantial impact on ExxonMobil’s results, with the company estimating a drop in earnings of around $1.4 billion to $1.8 billion due to the drop. Even more damaging will be the erosion of margins for various refined energy products, which will hit profits to the tune of $2.7 billion to $2.9 billion.

However, investors were pleased to see that the strength of the natural gas market will be able to offset at least some of the downward pressure on ExxonMobil’s earnings. The energy giant expects a profit of $1.8 billion to $2.2 billion thanks to better natural gas prices.

Ultimately, shareholders seemed happy with ExxonMobil’s overall direction. This guarantees a healthy year-over-year gain for the energy company, although it won’t top the strong second quarter that ExxonMobil enjoyed.

Schlumberger wants to boost its lithium business

Schlumberger shares posted even bigger gains, up 6%. The company is best known as an oil services company, but today announced a partnership with global water solutions provider Gradiant that will help Schlumberger’s NeoLith Energy business.

Under the partnership, Schlumberger will have access to Gradiant technology that will enable companies looking to extract lithium from brine to generate fresh water as a by-product of the production process. Gradiant should enable companies to obtain more concentrated amounts of lithium from their production in a more sustainable way, avoiding some of the environmental impacts that lithium generation processes have had in the past.

This decision is significant for Schlumberger because it aims to prove that it can move forward to serve energy producers with low-carbon and carbon-neutral business models. Given the strong demand for lithium for the production of electric vehicle batteries and other applications, there is no doubt that Schlumberger aims to take advantage of the industry’s strong growth potential.

Energy stocks are poised to post significant gains if the economy can weather the downward pressure the Fed’s interest rate hikes are putting on it. With oil prices still at historically attractive levels, there is potential for more gains from Schlumberger and ExxonMobil to come.

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Dan Caplinger has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.

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