For Chevron Corp., every ripple in the global crude oil market makes a major splash.
The 15 percent jump in the price of crude this quarter represents a $2.8 billion windfall. That’s because every time the average quarterly price of Brent -- the benchmark for most international oil sales -- increases by a dollar, Chevron scoops up an extra $325 million to $350 million in cash beyond certain expenses.
Chevron is more sensitive to crude price fluctuations than its North American peers, including Exxon Mobil Corp. and ConocoPhillips, according to Paul Cheng, an analyst at Barclays Plc. That’s because 67 percent of Chevron’s total output is crude, compared to 54 percent at Exxon and 48 percent at ConocoPhillips.
With just four trading days left in the quarter, Brent’s average is up about $8.40 a barrel versus the first quarter -- representing $2.8 billion in additional cash flow from operations for the No. 2 U.S. oil explorer. Chevron Chief Financial Officer Pat Yarrington spelled out the relationship between oil prices and Chevron’s cash during a conference call with analysts last month.
So far, investors haven’t glommed on: Chevron’s stock is down more than 5 percent since the end of March and is on pace for the longest streak of negative quarters since 2009.