For most of its history, Conoco (COP) had been resistant to the types profit streams that enabled Exxon and Chevron to have better reporting results during the low point in the business cycle. Exxon and Chevron are heavily invested in chemicals and always engage in some transportation work which is only mildly resistant to oil prices (the transportation business is affected by lower prices to the extent that oil companies cut back on production and have less oil available for transportation.)
The reason why Exxon and Chevron are more profitable at low points in the business cycle is because they operate what are called “integrated business models.” That’s jargon for upstream, midstream, and downstream production. Chevron and Exxon do all three. Upstream means you find the oil and sell it, midstream means you transport it, and downstream means you modify it into a final product that it can used in … Read the rest of this article!