Hess Corporation Stock Is A Risky Bet

Hess Corporation Stock Is A Risky Bet

KIEV, UKRAINE - 2018/12/06: In this photo illustration, the Hess Corporation Petroleum refineries ... [+] company logo seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)



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Hess Corporation stock (NYSE: HES) has rallied by 44% this month supported by a surge in crude oil prices and hopes of an early macroeconomic rebound. Given the likelihood of an easing in OPEC+ mandated cuts later this week, Trefis believes that Hess stock remains a risky bet at present. The company's third quarter revenues showed substantial improvement by declining just 22% (y-o-y) as compared to 50% (y-o-y) contraction in the second quarter. While the company has a strong liquidity position to cover near-term operating losses, further upside in the stock hinges on OPEC's decision to increase supply in lieu of rising prices. Interestingly, the U.S commercial crude oil inventories reached 1,354 million barrels last week and the EIA expects WTI benchmark to remain under $40/bbl at an average inventory level of 1,336 million barrels in the fourth quarter. We compare Hess stock performance during the current crisis with that during the 2008 recession in an interactive dashboard analysis.