Jump in Oil Prices is a Boon to These 5 Energy Players
From recent production cuts to explosion at the Sasref refinery to the prevailing trade tension and optimism over Brexit, all have worked in favor of oil prices. Brent crude oil futures, the global benchmark, rose 25 cents to $58.99 per barrel by 06:21 GMT on Oct 16, up 0.4% from the previous day's close. Meanwhile, the US West Texas Intermediate (WTI) crude gained 23 cents or 0.4 % to $53.04 a barrel.
We have thus shortlisted five energy players that investors can make the most amid rising oil prices.
Factors Behind Rise in Oil Price
The drop in global demand for oil has been a rising concern for the Organization of the Petroleum Exporting Countries (OPEC) and allied producers. As the supply for oil keeps growing and demand fading, oil producers are striving hard to reach a break even. To counter soft demand, OPEC, Russia and other producers have cut oil output by 1.2 million barrels per day.
A recent explosion caused by the gas leak during maintenance work at Saudi Arabia’s Sasref refinery also lifted oil price. The Middle East tension has always influenced oil price. Evidently, after the Sep 14 attack on Saudi Arabia’s Abqaiq oil processing facility, oil prices climbed higher for days till the company announced that supply was restored.
Moreover, news from the U.S.-China trade front also seems to have given oil prices a spike. U.S. House passed the Hong Kong Human Rights and Democracy Act overnight on Oct 15. The act would require an annual review if Hong Kong is sufficiently autonomous from Beijing. This review will help justify the city’s special trading status under the U.S. law.
China has vowed to retaliate if the United States passes this act. This could rattle the phase one agreement that has eased trade tensions considerably. Oil price rose as the market is worried about the outcome of the retaliation. This is because earlier, China had imposed a 5% retaliatory tariff on U.S. crude oil, giving American oil exporters a significant blow.
Further, optimism about a potential Brexit deal also shrugged off losses. As per the UK government’s latest statement in caseof a no-deal Brexit, fuel imports will not be subject to tariffs. Hence, tariff free fuel import will boost overall demand.
5 Oil Stocks to Buy Now
It’s quite obvious that from bigwig oil producers to rig operators to pipeline owners to refiners, all are likely to witness a rally in their share prices as oil prices scale upward. Energy shares have been one of the poorest performers so far this year. However, this uptick in oil prices will surely lure investors back. We have thus shortlisted five oil stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Crescent Point Energy Corp. CPG is a publicly traded company that engages in the acquisition, exploration and development of oil and natural gas properties in Western Canada. The company’s expected earnings growth rate for the current year is 43.9% in contrast to the industry’s projected decline of 6.1%.
The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the past 60 days. Crescent Point Energy flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
KoninklijkeVopak N.V. VOPKY is a publicly traded company that engages in tank terminal operations and storage of oil. The company’s expected earnings growth rate for the current year is 16% compared to the industry’s projected gain of 9.2%.
The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the past 60 days. KoninklijkeVopak flaunts a Zacks Rank #1.
NuStar Energy L.P. NS is a publicly traded company that engages in the transportation and storage of crude oil. The company’s expected earnings growth rate for the current year is 176.9% compared to the industry’s projected gain of 13.3%.
The Zacks Consensus Estimate for current-year earnings has improved 14.8% over the past 60 days. NuStar Energy carries a Zacks Rank #2.
EP Energy Corporation EPEGQ is a publicly traded company that engages in the acquisition and development of unconventional onshore oil and natural gas. The company’s expected earnings growth rate for the current year is 144% in contrast to the industry’s projected 18.5% decline.
The Zacks Consensus Estimate for current-year earnings has improved 3.2% over the past 60 days. EP Energy carries a Zacks Rank #2.
Exterran Corporation EXTN is a publicly traded company that is involved in natural gas compression, process, treatment and production equipment manufacture, and water treatment solutions. The company’s expected earnings growth rate for the next quarter is 107.1% compared to the industry’s projected gain of 99.7%.
The Zacks Consensus Estimate for current-year earnings has improved 15.9% over the past 60 days. Exterran Corporation carries a Zacks Rank #2.
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NuStar Energy L.P. (NS): Free Stock Analysis Report
Crescent Point Energy Corporation (CPG): Free Stock Analysis Report
KONINKLIJKE VPK (VOPKY): Free Stock Analysis Report
Exterran Corporation (EXTN): Free Stock Analysis Report
EP Energy Corporation (EPEGQ): Free Stock Analysis Report
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