A strong buzz of optimism prevails to cheer investors that oil demand will skyrocket in 2021 after plummeting last year. The shocking demand depreciation last year due to coronavirus woes had induced surplus inventories of crude oil across the world. This is being worked off currently since fuel demand is improving and with the pace of vaccine rollouts gathering steam, economies across the globe will possibly be on a better footing.
Oil Price at Pre-Pandemic Mark
The price of West Texas Intermediate (WTI) crude is now trading at more than $62 per barrel, signifying the pre-pandemic level. This reflects a turnaround from last April when the commodity was trading in a negative territory. In fact, since Apr 12, 2021, the price of the commodity has jumped close to 7%.
The spike in oil price found support recently after the International Energy Agency (IEA) revised its forecast for 2021 oil demand higher. In its latest monthly report, the Paris-based organization predicted that global crude demand for 2021 will increase 5.7 million barrel per day (mb/d) to 96.7 mb/d. This mirrored an improvement from the prior monthly report when IEA had projected global oil demand to rise 5.5 mb/d in 2021.
Per the U.S. Energy Information Administration (EIA) report, which suggested that commercial crude oil inventories in the Unites States fell 5.9 million barrels last week, also backed this recent crude price upsurge.
Boon for Crude Explorers
This significant rise in oil price is definitely a blessing for explorers and producers. With coronavirus vaccines gradually hitting the markets worldwide, there is a bullish sentiment that oil price will continue to remain healthy since fuel demand will ramp up further by the second half of this year.
Oil explorers and producers already started returning to prolific shale plays and will probably continue to add crude drilling rigs since expanding production volumes became beneficial nowadays.
Stocks in the Spotlight
Given the brightening crude pricing environment and the drillers resuming activities at oil patches, it will be ideal for investors to consider oil explorers and producers.
Hence, we employed our proprietary
stock screener to zero in on three oil stocks that have presence in the prolific shale plays of the United States and are therefore well poised to capitalize on from the upbeat scenario. All stocks currently sport a Zacks Rank #1 (Strong Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here
Headquartered in Midland, TX,
Diamondback Energy, Inc. ( FANG Quick Quote FANG - Free Report) is a pure-play Permian player with presence across more than 347,000 net acres in the Permian. The company has more than 12,300 gross horizontal locations, which enhance its production outlook. Notably, the stock is likely to see earnings growth of 144.7% in 2021.
Domiciled in Dallas, TX,
Matador Resources Company ( MTDR Quick Quote MTDR - Free Report) has a strong footprint in liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays. This stock is likely to see an earnings growth rate of 310.7% in 2021. EOG Resources, Inc. ( EOG Quick Quote EOG - Free Report) , based in Houston, TX, has premium drilling locations in all the prolific shale plays in the United States that include Delaware Basin, a sub-basin of the broader Permian. The company is likely to see earnings growth of 272.6% for the ongoing year. More Stock News: This Is Bigger than the iPhone!
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