7 oil stocks to buy as crude prices rise
Gains in oil prices provide opportunities for investors. West Texas Intermediate crude oil prices recently exceeded $ 80 per barrel for the …
Gains in oil prices provide opportunities for investors.
West Texas Intermediate crude oil prices recently exceeded $ 80 a barrel for the first time since 2014. A classic imbalance between supply and demand has triggered a surge in energy prices around the world. As economies reopen at full capacity, demand for energy is rebounding, while supply in China and other parts of the world is limited. As a result, prices for oil, natural gas, coal and other energy products are now at or near multi-year highs. Rising oil prices are great news for oil inventory margins and profits. Here are seven oil stocks to buy today.
Exxon Mobil Corp. (symbol: XOM)
Exxon Mobil is America’s largest oil major. Analyst Stewart Glickman, analyst at CFRA Research, says Exxon’s prominent toll has been hit during the pandemic, but 2024 could be a major turning point for Exxon. At that time, Exxon is expected to start producing oil from its huge Payara field in Guyana, which is expected to be a significant source of long-term cash flow for the company. Income investors are likely relieved that the company’s 5.6% dividend survived the 2020 downturn, and Glickman predicts Exxon earnings in 2021 will exceed 2019 levels. CFRA has a âbuyâ rating for XOM shares.
PetroChina Co. Ltd. (PTR)
PetroChina is the largest oil and gas producer in China. Despite the general weakness of Chinese stocks listed in the United States due to concerns over regulatory crackdowns and potential write-offs, rising energy prices have pushed PetroChina shares up about 70% since March. beginning of the year. Analyst Hazim Bahari, analyst at CFRA, said PetroChina relies more on natural gas earnings at this point after divesting its pipeline assets in 2020. Bahari expects 20% revenue growth in 2021 to be will moderate to just 4% growth in 2022, but he says the stock is still cheap at its current valuation. CFRA has a âbuyâ rating for PTR shares.
TotalEnergies SE (TTE)
TotalEnergies is a French major in oil and gas. CFRA analyst Jia Man Neoh says TotalEnergies is his top choice of stocks among European oil majors. He likes the company’s upstream defensive asset portfolio, which is heavily exposed to low-cost liquid natural gas projects. Neoh says TotalEnergies has an impressive portfolio of renewable energy development projects and that the company’s operations are extremely efficient. TotalEnergies can generate free cash flow at breakeven point at Brent crude oil prices as low as $ 25 a barrel, and Neoh says the company also has a âbest-in-classâ track record. CFRA has a âstrong buyâ rating for TTE shares.
ConocoPhillips is one of the largest independent oil and gas exploration and production companies in the world. The company made headlines in September when it agreed to buy the Permian Basin assets of Royal Dutch Shell PLC (RDS.A, RDS.B) for $ 9.5 billion, increasing its net acreage by 30%. Glickman says the deal with Shell came at a high price, but creates potentially significant synergy opportunities. ConocoPhillips clearly focuses on the Permian Basin. In 2020, the company also acquired Permian-based Concho Resources for $ 9.7 billion. CFRA has a âbuyâ rating for COP shares.
BP PLC (BP)
BP is a British integrated oil and gas company. Neoh says the company’s 50 gigawatt renewable power generation capacity by 2030 is an indication of its long-term renewable energy hub project. BP only had 3.3 GW of renewable capacity in 2020. The company says it will invest around $ 5 billion per year to meet its long-term goals, but Neoh says the investment is a necessary step in the future. right direction to secure the future of the company. BP also recently increased its dividend and relaunched its share buyback program. CFRA has a âbuyâ rating for BP shares.
Pioneer Natural Resources Co. (PXD)
Pioneer Natural Resources is an American onshore oil and gas producer with a primary focus on the Permian Basin. Glickman says the company’s relatively high exposure to oil versus gas has helped Pioneer outperform the financial returns of many of its peers. He says the life of the company’s 9.5-year reserves is relatively short, but its Permian acreage has attractive, low-cost wells. Glickman says the Pioneer buyout of Parsley Energy has helped resolve its reserve life issues and the stock is trading at a steep discount to its fair value. CFRA has a âbuyâ rating for PXD stocks.
Schlumberger SA (SLB)
Schlumberger is one of the world’s leading petroleum services companies. Glickman says the 2020 slowdown likely helped inspire Schlumberger’s long-term transition to clean energy services. He predicts that Schlumberger will outperform its competitors in clean energy technology given the company’s long-term track record of superior innovation. Schlumberger already has nearly 100 dedicated upstream carbon reduction technologies, and it also has new energy projects focused on large-scale clean hydrogen and geothermal energy. As oil producers seek to reduce their carbon footprint, Glickman says Schlumberger could be a big winner. CFRA has a âbuyâ rating for SLB shares.
Oil Inventories to Buy as Crude Prices Rise:
– Exxon Mobil Corp. (XOM)
– PetroChina Co. Ltd. (PTR)
– TotalEnergies SE (TTE)
– ConocoPhillips (COP)
– BP PLC (BP)
– Pioneer Natural Resources Co. (PXD)
– Schlumberger SA (SLB)
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7 oil stocks to buy as crude prices rise originally appeared on usnews.com