Wall Street analysts on Feb. 1 gave little credence to the possibility of a megamerger between Exxon Mobil Corp. and Chevron Corp., as news of talks last year between the two largest U.S. oil companies leaked ahead of Exxon’s results that are expected to show the company posting its first-ever annual loss.

Shares in both the companies were down in early trading in New York, despite a rising overall market and weekend gains in global crude prices.

UPDATE:

Exxon Mobil Posts First Annual Loss As a Public Company

“At the depths of the market last year... a cost-cutting focused merger of the two companies may have made sense and also scale matters in this industry so it would have created by far the largest integrated oil company,” said Anish Kapadia, director of energy at London-based Palissy Advisors.

However, anti-trust concerns and the new U.S. administration’s stance on big mergers make it unlikely that a deal resurfaces, Kapadia said, adding that buying smaller, hard-hit oil companies gives Exxon Mobil and Chevron more value.

As oil producers in Europe adapt to investors’ push for a shift into renewables, it is also possible that Chevron or Exxon Mobil could buy the oil-producing business of a European major in the coming years, Kapadia said.

Exxon Mobil’s year-end results scheduled for Feb. 2 are expected to be marred by a charge of up to $20 billion on the value of its natural gas properties.

The collapse in oil prices last April briefly pushed crude into negative territory and created a survival crisis for large parts of the U.S. industry.

“Given the precipitous drop [last year]... it is not surprising that XOM and CVX had a discussion about merging,” said Mark Stoeckle, CEO of Baltimore-based Adams Funds.

“The sharp snapback in prices likely cooled both companies. There would no doubt be significant cost synergies to be had, but the antitrust issues in a Biden administration would probably be too much to overcome.”