Chevron Stock May Be Too Late to Buy as Oil Prices Soar

The price of Brent Crude oil has broken through the $100/barrel threshold, reaching a high of over $108. This surge in prices is bad news for most, but good news for US oil companies like Chevron (CVX) and ExxonMobil (XOM).

Historically, Chevron's stock price has moved in tandem with Brent Crude oil prices. During the six-and-a-half-month Iran-Iraq conflict, the price of Brent Crude fluctuated wildly, but both Chevron's and ExxonMobil's stock prices followed suit.

The reason for this correlation is that most of Chevron's production is located outside the Middle East, allowing it to benefit from higher global oil prices driven by Middle East supply disruptions while still producing plenty of oil to sell at those inflated prices.

However, with Brent Crude prices already above $108/barrel and approaching peak levels seen in March and May, investors may be too late to buy Chevron stock for short-term gains. Historically, oil prices have rarely moved above $110/barrel, and even when they have, they've hardly ever stayed at that level for long.