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Oil prices have been rising since mid-August after Saudi Arabia decided to cut production by a million barrels per day till the end of 2023. Before this event, Russia, the third largest oil producer in the world, had announced that it would cut its exports by 300,000 barrels. This supply-side crisis had pushed oil prices up and the United States was forced to dig deep into its oil reserves. This entailed that the crude oil inventories in the United States dwindled by 2.2 million barrels to just more than 416 million barrels in the week ending Sep 22. The current reserves are a near-optimal minimum.
As a result, on Wednesday, Sep 27, WTI crude prices jumped more than 3% to settle at $93.68/barrel. Brent crude closed up $2.59, or 2.8%, at $96.55/barrel. It breached the $97 mark during the session.
Energy prices were singularly responsible for the relatively high 0.6% consumer-side inflation seen in August. Because of their intrinsic nature and role in transportation and logistics, when energy prices go up, inflation follows suit. Core inflation, which sets aside food and energy prices, was on expected lines, proving the role of oil in the August inflation metrics.
Energy price led to the four-decades-high inflation seen in U.S. markets in 2022, but it stabilized in the summer of 2023. It is on its way up again. The macroeconomic factors fueling energy prices are not going away for a while. It might be prudent to invest in the energy sector currently, with the general consensus being that oil will breach the $100 mark sooner rather than later.
Our Choices
The stocks below flaunt a Zacks Rank #1 (Strong Buy) or Rank #2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
Berry Corporation (BRY - Free Report) is an independent upstream energy company that develops and produces conventional oil reserves in the United States.
Berry’s expected earnings growth rate for the next year is 55.7%. The Zacks Consensus Estimate for its current-year earnings has improved 285.7% over the past 60 days. This Zacks Rank #2 company has a VGM Score of A.
Profire Energy, Inc. (PFIE - Free Report) provides burner and combustion management systems and solutions for the upstream, midstream and downstream transmission segments of the oil and gas industry.
Profire’s expected earnings growth rate for the current year is 187.5%. The Zacks Consensus Estimate for its current-year earnings has improved 27.8% over the past 60 days. This Zacks Rank #2 company has a VGM Score of B.
Solaris Oilfield Infrastructure, Inc. (SOI - Free Report) is a mobile proppant management systems manufacturer catering to oil and natural gas well sites in the United States.
Solaris’ expected earnings growth rate for the current year is 25%. The Zacks Consensus Estimate for its current-year earnings has improved 10.5% over the past 60 days. This Zacks Rank #1 company has a VGM Score of A.
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3 Stocks to Buy as Oil Prices Continue to Rise
Oil prices have been rising since mid-August after Saudi Arabia decided to cut production by a million barrels per day till the end of 2023. Before this event, Russia, the third largest oil producer in the world, had announced that it would cut its exports by 300,000 barrels. This supply-side crisis had pushed oil prices up and the United States was forced to dig deep into its oil reserves. This entailed that the crude oil inventories in the United States dwindled by 2.2 million barrels to just more than 416 million barrels in the week ending Sep 22. The current reserves are a near-optimal minimum.
As a result, on Wednesday, Sep 27, WTI crude prices jumped more than 3% to settle at $93.68/barrel. Brent crude closed up $2.59, or 2.8%, at $96.55/barrel. It breached the $97 mark during the session.
Energy prices were singularly responsible for the relatively high 0.6% consumer-side inflation seen in August. Because of their intrinsic nature and role in transportation and logistics, when energy prices go up, inflation follows suit. Core inflation, which sets aside food and energy prices, was on expected lines, proving the role of oil in the August inflation metrics.
Energy price led to the four-decades-high inflation seen in U.S. markets in 2022, but it stabilized in the summer of 2023. It is on its way up again. The macroeconomic factors fueling energy prices are not going away for a while. It might be prudent to invest in the energy sector currently, with the general consensus being that oil will breach the $100 mark sooner rather than later.
Our Choices
The stocks below flaunt a Zacks Rank #1 (Strong Buy) or Rank #2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
Berry Corporation (BRY - Free Report) is an independent upstream energy company that develops and produces conventional oil reserves in the United States.
Berry’s expected earnings growth rate for the next year is 55.7%. The Zacks Consensus Estimate for its current-year earnings has improved 285.7% over the past 60 days. This Zacks Rank #2 company has a VGM Score of A.
Profire Energy, Inc. (PFIE - Free Report) provides burner and combustion management systems and solutions for the upstream, midstream and downstream transmission segments of the oil and gas industry.
Profire’s expected earnings growth rate for the current year is 187.5%. The Zacks Consensus Estimate for its current-year earnings has improved 27.8% over the past 60 days. This Zacks Rank #2 company has a VGM Score of B.
Solaris Oilfield Infrastructure, Inc. (SOI - Free Report) is a mobile proppant management systems manufacturer catering to oil and natural gas well sites in the United States.
Solaris’ expected earnings growth rate for the current year is 25%. The Zacks Consensus Estimate for its current-year earnings has improved 10.5% over the past 60 days. This Zacks Rank #1 company has a VGM Score of A.