Is Chevron stock a good buy in April 2022?

Chevron Corporation (NYSE: CVX) shares have advanced more than 40% since the beginning of the 2022 year, and the current price stands at $170.

Chevron could double production in Venezuela

Chevron Corporation is an American multinational energy corporation engaged in every aspect of oil and natural gas; 70% of its reserves are concentrated in the U.S., Australia, Kazakhstan, and the Gulf of Mexico.

The company’s business has proven improvements throughout the last two quarters, and Chevron shares continue to perform well as the rise in oil prices keeps investors in a positive mood.

The U.S. Energy Information Administration (EIA) reported that crude oil production would reach record levels in 2023, and according to EIA, crude oil prices will remain high enough to spur growth in crude oil production through 2023.

Goldman Sachs increased its base-case 2022 oil price forecast to $135 from $98, and high oil prices would continue to support producers like Exxon, Chevron, Shell, BP, and others.

Chevron plans to spend $15 billion on capital and exploratory projects in the 2022 fiscal year, and according to the latest news, Chevron was granted a new concession for exploitation in Argentina’s Vaca Muerta shale formation from the Neuquen provincial government.

Vaca Muerta is the world’s fourth-largest shale oil reserve and the second largest for shale gas, and in the three-year pilot stage, Chevron will invest approximately $80 million.

Last month, Chevron requested a more supportive energy policy pressing the Biden administration to ease sanctions against Venezuela so the company could boost production in the country.

CEO Mike Wirth said that Chevron could double Venezuela’s 800K bbl/day production within months, which could replace the loss of 700K bbl/day the U.S. was importing from Russia before the invasion of Ukraine. CEO Mike Wirth said:

A high-level meeting between the U.S and Venezuelan officials last month opened the possibility that sanctions imposed by the U.S. on PDVSA in 2019 could be relaxed due to the global need for fuel caused by Russia’s invasion of Ukraine. The Biden administration “very likely” will extend a license for Chevron to operate in Venezuela, the chair of the ad-hoc board of the PDVSA state-run oil.

Chevron trades at less than ten times TTM EBITDA, a dividend yield of 3.36% looks safe, and with a market capitalization of $325 billion, shares of this company are fairly valued.

Chevron shares continue to perform wellData source: tradingview.com

Chevron Corporation shares have advanced more than 40% since the beginning of January 2022, and for now, the positive trend remains intact. If the price jumps above $180, the next price target could be at $190 or even $200.

The strong support level stands at $150, and if the price falls below this level, it would be a “sell” signal, and we have the open way to the $120.

Summary

Chevron shares continue to perform well, and CEO Mike Wirth said that Chevron could double production in Venezuela, which could replace the loss of 700K bbl/day the U.S. was importing from Russia. The positive trend remains intact, and if the price of Chevron stock jumps above $180, the next price target could be at $190 or even $200.

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