Chevron (CVX): Big oil is no longer the last man standing

The large oil companies may have been the last "safe haven" stocks. They have magnificent balance sheets; they have posted record earnings for several quarters; and they pay out relatively large and safe dividends.

The market has believed that "big oil" could remain profitable even with energy prices depressed. The money that the companies make on refining is outstanding, because the profits on selling gas, heating oil and petrochemicals are good.

Chevron (NYSE: CVX) burst that bubble by warning on profits. According to The Wall Street Journal, "Chevron said its earnings for the fourth quarter would be "significantly lower" than the previous period."

Over the last year, Chevron and most other large oil companies have done better than the market. During the last twelve months, Chevron's shares declined 20% compared to over 30% for the DJIA. And the firm has a 3.5% yield.

What happens to "big oil" now? For investors, the hope for a rebound in these stocks appears to be tied to whether the price of crude moves up sharply again. In an odd way, OPEC has become the ally of a number of U.S. shareholders.

Douglas A. McIntyre is an editor at 247wallets.com.