News out of Washington has oil stocks in focus today. As gas prices have risen, some have blamed the executives of American oil producers. Today these execs appeared before Congress to address a big accusation — that they are prioritizing corporate profits over measures that could reduce gas prices. Their claims that they have not engaged in outright price gouging have helped boost oil stocks today. However, there are still other factors investors should consider.
What’s Happening with Oil Stocks
Today’s hearing featured leaders from Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX) and Shell (NYSE:SHEL). The general consensus was that oil prices are beyond their control and are influenced by external forces. “The uncertainty of supply in a tight market with growing demand leads to significant price volatility — which is what we are seeing today,” Exxon CEO Darren Woods said.
This trio also ended the day on a high note, at least relative to the broader market. XOM gained 1.1% while CVX just passed 0.9%. SHEL closed up 0.7%. Peer BP (NYSE:BP) can’t say the same. Shares closed down 0.4%.
Why It Matters
There is nothing surprising about oil executives shrugging off responsibility for rising gas prices. It also makes sense that oil stocks would rise as the sector’s leaders stood firmly behind their actions.
With many factors influencing oil prices, it is difficult to prove that specific companies are directly responsible for the elevation of prices. This hasn’t stopped accusations from lawmakers, who are largely divided on partisan lines on the issue. In fact, however, experts have pointed to supply-demand imbalances as responsible for rising prices.
Today’s hearing reminded Wall Street of this. It granted industry figureheads, such as Chevon CEO Michael Wirth, the opportunity to claim that they had “no tolerance for price gouging.”
Why It Matters
While Russia’s invasion of Ukraine has certainly presented unique challenges for the industry, it hasn’t yet posed dire consequences for Big Oil. Despite reports that the sector is entering a bear market, oil’s leaders are confident in the future of their industry.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.