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OPEC+ Decides to Hike Production, Bullish on Oil Recovery
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With the OPEC and non-OPEC allies, collectively called OPEC+, deciding to gradually increase crude production, the worst seems to be over for oil.
OPEC+ to Increase Production
In January, OPEC+ will increase production by 500,000 barrels per day (Bbl/D), thereby bringing the total production cut from the current 7.7 million Bbl/D to 7.2 million Bbl/D. The agreement was reached after oil producers met on Thursday after Tuesday's scheduled meeting got postponed amid a standoff over decisions to increase production.
When OPEC+ was gearing to meet online, many analysts foresaw the cartel and its allies to agree on extending the existing production cut, at least through March.
Oil Producers Bet on Sustained Fuel Demand Recovery
The latest agreement to gradually increase production reflects oil producers’ expectation of sustained global fuel demand recovery with coronavirus vaccines now a closer reality.
Notably, since early 2020, the pandemic has been denting global fuel demand, dragging crude prices down. Eventually, finances of major energy players, including Russia and Saudi Arabia, got strained. Moreover, to survive the pandemic, European energy giants like BP plc (BP - Free Report) and Royal Dutch Shell plc were compelled to slash dividend payments, while some are opting for job cuts as measure to reduce costs.
However, the business scenario is gradually getting healthier as evident from the partial recovery in crude prices over the past few months. With several vaccines in development seeing success, the outlook for overall energy market is getting brighter. Thus, instead of extending the existing production cut, OPEC+ bets that the gradual increase in production will not stall the crude price recovery.
Energy Stocks to Gain
Importantly, the West Texas Intermediate (WTI) oil price has crossed the $45-per-barrel mark, while Brent crude price is approaching $50. Thus, oil explorers and producers are well placed to capitalize on the momentum. Oilfield service companies who assist oil drillers to efficiently drill wells are also likely to gain.
Thus, it seems to be an opportune moment for energy investors to keep an eye on upstream energy players. Here, we present four stocks carrying a Zacks Rank #3 (Hold) that are well positioned to gain. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Headquartered in Houston, TX , EOG Resources (EOG - Free Report) is involved in developing key oil shale plays in the United States. The company has a strong footprint in the Permian, Eagle Ford, the Rocky Mountains. The company has witnessed upward earnings estimate revisions for 2020 and 2021, respectively, in the past 30 days.
Schlumberger Limited (SLB - Free Report) , based in Houston, TX, is the world’s largest energy equipment and services company. In roughly 120 countries, the company provides oilfield services to oil and gas explorers and producers. In 2021, the stock is likely to see earnings growth of 24%. Also, in the past 60 days, the stock has seen upward earnings estimate revisions for 2020 and 2021, respectively.
Headquartered in Dallas, TX, Matador Resources Company (MTDR - Free Report) has a strong footprint in the liquids-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The stock is likely to see earnings growth of 186.6% in 2021. Moreover, the stock has seen upward earnings estimate revisions for 2020 and 2021, respectively, over the past 60 days.
Concho Resources Inc. , headquartered in Midland, TX, conducts operations across the Delaware and the Midland sub-basins of the broader Permian. In the past seven days, the stock has witnessed upward earnings estimate revisions for 2020 and 2021, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
OPEC+ Decides to Hike Production, Bullish on Oil Recovery
With the OPEC and non-OPEC allies, collectively called OPEC+, deciding to gradually increase crude production, the worst seems to be over for oil.
OPEC+ to Increase Production
In January, OPEC+ will increase production by 500,000 barrels per day (Bbl/D), thereby bringing the total production cut from the current 7.7 million Bbl/D to 7.2 million Bbl/D. The agreement was reached after oil producers met on Thursday after Tuesday's scheduled meeting got postponed amid a standoff over decisions to increase production.
When OPEC+ was gearing to meet online, many analysts foresaw the cartel and its allies to agree on extending the existing production cut, at least through March.
Oil Producers Bet on Sustained Fuel Demand Recovery
The latest agreement to gradually increase production reflects oil producers’ expectation of sustained global fuel demand recovery with coronavirus vaccines now a closer reality.
Notably, since early 2020, the pandemic has been denting global fuel demand, dragging crude prices down. Eventually, finances of major energy players, including Russia and Saudi Arabia, got strained. Moreover, to survive the pandemic, European energy giants like BP plc (BP - Free Report) and Royal Dutch Shell plc were compelled to slash dividend payments, while some are opting for job cuts as measure to reduce costs.
However, the business scenario is gradually getting healthier as evident from the partial recovery in crude prices over the past few months. With several vaccines in development seeing success, the outlook for overall energy market is getting brighter. Thus, instead of extending the existing production cut, OPEC+ bets that the gradual increase in production will not stall the crude price recovery.
Energy Stocks to Gain
Importantly, the West Texas Intermediate (WTI) oil price has crossed the $45-per-barrel mark, while Brent crude price is approaching $50. Thus, oil explorers and producers are well placed to capitalize on the momentum. Oilfield service companies who assist oil drillers to efficiently drill wells are also likely to gain.
Thus, it seems to be an opportune moment for energy investors to keep an eye on upstream energy players. Here, we present four stocks carrying a Zacks Rank #3 (Hold) that are well positioned to gain. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Headquartered in Houston, TX , EOG Resources (EOG - Free Report) is involved in developing key oil shale plays in the United States. The company has a strong footprint in the Permian, Eagle Ford, the Rocky Mountains. The company has witnessed upward earnings estimate revisions for 2020 and 2021, respectively, in the past 30 days.
Schlumberger Limited (SLB - Free Report) , based in Houston, TX, is the world’s largest energy equipment and services company. In roughly 120 countries, the company provides oilfield services to oil and gas explorers and producers. In 2021, the stock is likely to see earnings growth of 24%. Also, in the past 60 days, the stock has seen upward earnings estimate revisions for 2020 and 2021, respectively.
Headquartered in Dallas, TX, Matador Resources Company (MTDR - Free Report) has a strong footprint in the liquids-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The stock is likely to see earnings growth of 186.6% in 2021. Moreover, the stock has seen upward earnings estimate revisions for 2020 and 2021, respectively, over the past 60 days.
Concho Resources Inc. , headquartered in Midland, TX, conducts operations across the Delaware and the Midland sub-basins of the broader Permian. In the past seven days, the stock has witnessed upward earnings estimate revisions for 2020 and 2021, respectively.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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