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Keep an Eye on 3 Oil Explorers Amid Elevated Crude Prices

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The impact of fluctuating oil prices extends beyond daily numerical changes, exerting considerable influence on countries and economies. Recently, there has been a downturn in crude oil prices.

The recent marginal decrease in oil prices can be attributed to conflicting issues of supply and demand. This is primarily linked to the anticipated substantial rise in U.S. crude oil inventories and the impending OPEC+ meeting where major oil-producing nations will determine whether to sustain, cease or augment production cuts.

Despite experiencing a decline to their lowest point in four months, the current pricing landscape remains favorable for upstream energy companies. The West Texas Intermediate (“WTI”) crude price is trading at more than $75 per barrel, which is highly favorable for exploration and production activities.

The outlook for oil prices appears favorable in the coming months, attributed to persisting uncertainties related to tensions in the Middle East and the limited global supply of the commodity, both factors expected to bolster crude prices.

In its latest short-term energy outlook, the U.S. Energy Information Administration predicts the average spot price of WTI crude at $89.64 per barrel in the December-end quarter, higher than $82.25 in the third quarter.

Oil prices continue to be advantageous for upstream enterprises despite the challenges posed by fluctuations and uncertainties in the energy market. With the United States going through inflationary times, investing in solid oil stocks will act as a hedge. We have identified three upstream stocks with upward-trending earnings revisions.

APA Corporation’s (APA - Free Report) large, geographically diversified reserve base and high-quality drilling inventory are likely to guarantee multi-year production growth. In the United States, the upstream player mainly operates in the prolific Permian Basin. One of the largest oil producers in Permian, APA operates approximately 6,000 gross oil and gas wells in the region,

In the third quarter, this Zacks Rank #3 (Hold) company’s production of oil and natural gas averaged 412,252 oil-equivalent barrels per day (Boe/d), which comprises 67% liquids. The figure increased 7.9% from the year-ago quarter and was above our expectation of 410,387 Boe/d. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Diamondback Energy, Inc. (FANG - Free Report) is an independent oil and gas exploration & production company with a primary focus on the Permian Basin. It is sitting on about 476,000 net acres in the Delaware and Midland regions, with more than 8,000 drilling locations and production of around 380,000 barrels of oil equivalent per day.

In the third quarter, this Zacks Rank #3 company’s production of oil and natural gas averaged 452,848 barrels of oil equivalent per day (BOE/d), comprising 59% oil. The figure was up 15.9% from the year-ago quarter and surpassed our estimate of 442,803 BOE/d.

Northern Oil and Gas, Inc. (NOG - Free Report) is an independent upstream operator engaged in the acquisition, exploration, development and production of oil and natural gas properties. While Northern Oil and Gas’ interests primarily lie in the Williston Basin, a recent series of transactions have helped it to establish scale across the lucrative Permian Basin’s core assets in partnership with top operators.

In the third quarter, this Zacks Rank #3 company’s production (comprising 62% oil) increased 29% from the year-ago level to 102,327 barrels of oil equivalent per day (Boe/d). The figure also surpassed our estimate of 101,012 Boe/d.

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