The energy market is regaining strength, this time on Saudis’ surprise steep oil production cut. Despite uncertainties clouding the short-term fuel demand outlook owing to rapidly rising coronavirus cases across many countries, oil price has soared. In fact, there are possibilities that despite the stricter social-distancing measures, being triggered by the recent discovery of the new variant of the virus, oil price will remain stable since Riyadh is taking charge of the market.
Crude Price Soars
The price of West Texas Intermediate (WTI) oil price has crossed the $50-per-barrel psychological level for the first time since last February. Notably, the price of WTI crude jumped 5.2% to $50.11 in early afternoon trading on Jan 5. The surge in the commodity price was primarily supported by a surprise move by Saudi Arabia that the kingdom will unilaterally cut 1 million barrels of crude production every day that will start in February and will extend through March.
Following a monthly assessment, it has been agreed by the cartel – stated as OPEC+, comprising OPEC and its crude oil-producing allies – that they will keep output broadly steady at current mark.
Importantly, the complex deal suggests that in February and March, Russia and Kazakhstan will combinedly add 75,000 barrels per day to the market. The increase in production will be more than offset by the voluntary cut of oil production by Saudi Arabia, thereby aiding the crude price rally amid the coronavirus-induced market uncertainties.
Oil Producers to Gain
The rise in crude price is definitely a boon to oil explorers and producers in the U.S. resources. The upstream companies have started returning to oil resources following the massive rise in crude prices over the past several months and the momentum will largely continue by the surprise announcement of Saudi Arabia.
Oil price is also being backed by the rolling out of coronavirus vaccines across countries that most analysts believe will help global fuel demand to bounce back strongly by late-2021.
With possibilities of positive developments in place, it is time for investors to take care of portfolios with oil stocks. We have employed our proprietary
stock screener to zero down on four oil stocks that have presence in prolific plays in the United States and hence are well poised to gain. Three of the stocks sport a Zacks Rank #1 (Strong Buy), while another one carries a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here Our Picks
Headquartered in Denver, CO,
HighPoint Resources Corporation is a leading upstream energy firm with strong presence in Denver-Julesburg Basin of Colorado. The Zacks #1 Ranked stock is likely to come up with earnings growth of 12.3% in 2021. Diamondback Energy Inc. ( FANG Quick Quote FANG - Free Report) — headquartered in Midland, TX — is a leading pure play Permian operator. The #1 Ranked stock has witnessed upward earnings estimate revisions for 2021 in the past 30 days. In 2021, the upstream firm is likely to see earnings growth of 57.7%. Bonanza Creek Energy, Inc. ( BCEI Quick Quote BCEI - Free Report) , headquartered in Denver, CO, is a premier upstream company with exploration and production activities being focused on the Rocky Mountain region of the United States. The Zacks #1 Ranked stock is likely to see earnings growth of 41.7% in 2021.
Headquartered in Denver, CO,
Centennial Resource Development Inc ( CDEV Quick Quote CDEV - Free Report) is a leading producer of oil, with strong presence in the most prolific Permian basin’s sub-basin – Delaware basin. The company, with a Zacks Rank of 2, is likely to see bottom-line growth of 94.7% in 2021. Breakout Biotech Stocks with Triple-Digit Profit Potential
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