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3 Oil & Gas Stocks to Consider Amid Rising Crude Prices
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The global oil market is currently witnessing a bullish trend, with prices nearing the significant $90-a-barrel threshold. This recent upsurge in oil prices, marked by the performance of benchmarks, such as Brent crude and West Texas Intermediate (WTI) crude, is a critical juncture for traders and investors alike. Brent crude recently settled at $90.50 a barrel, marking a modest 0.13% increase in the latest trading session, whereas WTI crude saw a slight rise of 0.1% to $86.52 a barrel in the latest trading session.
Heightened Geopolitical Tensions Influence Market
A notable driver behind the rally in WTI crude oil prices is the escalating geopolitical unrest in the Middle East, particularly the tensions between Israel and Iran. An Israeli attack on the Iranian embassy in Syria has stoked fears of a broader conflict, potentially disrupting oil supplies from a region that is crucial to the global oil market.
Iran, being the third-largest crude oil producer within the Organization of the Petroleum Exporting Countries, plays a significant role in the global oil supply dynamics. This backdrop of geopolitical tensions has been a key factor propelling the upward trajectory of WTI crude oil prices.
Economic Factors Contributing to the Rise
In addition to geopolitical tensions, economic factors are playing a pivotal role in shaping the current oil market dynamics. The United States' healthy economic growth, coupled with signs of economic recovery in China, has bolstered crude oil prices. Brent Crude, for instance, has seen an impressive jump of more than 18% so far this year. This resurgence in oil prices comes after a period of relative underperformance in the latter half of 2023, highlighting a robust recovery in the energy sector.
High Dividend Yield: A Boon for Investors
The current price levels are particularly beneficial for upstream enterprises and investors in the energy sector. The spike in WTI crude oil prices has not only fostered a favorable environment for oil and energy stocks but also highlighted those with high dividend yields. Companies within the Zacks Oils and Energy sector, for example, have been identified as standout performers, offering lucrative dividends and capitalizing on the surging commodity prices.
3 Stocks to Consider
Shares of oil companies are also gaining. Considering the current elevated oil prices, we have identified three upstream stocks with upward-trending earnings revisions and a dividend yield of more than 2%.
APA Corporation (APA - Free Report) is an independent energy company specializing in the exploration, development and production of natural gas, crude oil and natural gas liquids. With operations spanning the United States, Egypt and the North Sea, APA Corp maintains a strategic focus on these key geographic areas, while exploring opportunities in Suriname and other international locations. The company has a diversified portfolio of conventional and unconventional assets, both onshore and offshore.
The Zacks Rank #3 company’s (Hold) financial performance is closely tied to the fluctuations in oil prices. Higher oil prices can significantly benefit APA Corp by increasing revenues from oil sales, enhancing the profitability of oil extraction operations and making capital investment in new projects more financially viable. Given that a substantial portion of APA's production consists of oil and liquids, which accounted for around 68% of its total proved reserves as of the end of 2023, the company stands to gain from an uptrend in oil market prices, driving stronger cash flow generation and improving its financial metrics.
Murphy Oil Corporation (MUR - Free Report) , a global oil and gas exploration and production company, operates both onshore and offshore, with activities primarily in the United States and Canada. The company split its U.S. downstream business in 2013 to focus on exploration and production.
MUR's operations span significant geographic segments, producing crude oil, natural gas and natural gas liquids. In 2023, its production was notably high, with an average of 192,640 barrels of oil equivalent per day. The company's operations are primarily in the Gulf of Mexico and South Texas within the United States, with additional activities in Canada, Brazil, Mexico, Vietnam and Brunei.
Higher oil prices benefit Murphy Oil by increasing revenues from its oil production, enhancing the company's financial performance, and the ability to invest in further exploration and production activities. The pricing of oil and gas directly influences the Zacks Rank #2 (Buy) company's operational success, cash flows, and capacity to sustain or expand its reserve base, making it sensitive to market price fluctuations.
California Resources Corporation (CRC - Free Report) is an independent oil and natural gas exploration and production, and carbon management company with operations exclusively in California. It is committed to energy transition, boasting some of the lowest carbon intensity production in the United States, and is developing several carbon capture and storage projects within California. As of the end of 2023, CRC had estimated proved reserves of 377 million barrels of oil equivalent (MMBoe), with significant operations in the San Joaquin, Los Angeles, and Sacramento basins, managing 1.7 million net mineral acres.
Higher oil prices directly benefit CRC by increasing the revenue potential from its oil and gas production. Given that 60% of its total production is oil, the company's financial performance is highly sensitive to fluctuations in oil prices. An increase in oil prices can significantly enhance CRC's operating margins and profitability, providing more cash flow that can be used for further development, debt reduction or shareholder returns. Additionally, the Zacks Rank #3 company is well-positioned to capitalize on favorable oil market conditions, with contracts in place for oil delivery that often reference global benchmarks like Brent crude, which command higher prices.
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3 Oil & Gas Stocks to Consider Amid Rising Crude Prices
The global oil market is currently witnessing a bullish trend, with prices nearing the significant $90-a-barrel threshold. This recent upsurge in oil prices, marked by the performance of benchmarks, such as Brent crude and West Texas Intermediate (WTI) crude, is a critical juncture for traders and investors alike. Brent crude recently settled at $90.50 a barrel, marking a modest 0.13% increase in the latest trading session, whereas WTI crude saw a slight rise of 0.1% to $86.52 a barrel in the latest trading session.
Heightened Geopolitical Tensions Influence Market
A notable driver behind the rally in WTI crude oil prices is the escalating geopolitical unrest in the Middle East, particularly the tensions between Israel and Iran. An Israeli attack on the Iranian embassy in Syria has stoked fears of a broader conflict, potentially disrupting oil supplies from a region that is crucial to the global oil market.
Iran, being the third-largest crude oil producer within the Organization of the Petroleum Exporting Countries, plays a significant role in the global oil supply dynamics. This backdrop of geopolitical tensions has been a key factor propelling the upward trajectory of WTI crude oil prices.
Economic Factors Contributing to the Rise
In addition to geopolitical tensions, economic factors are playing a pivotal role in shaping the current oil market dynamics. The United States' healthy economic growth, coupled with signs of economic recovery in China, has bolstered crude oil prices. Brent Crude, for instance, has seen an impressive jump of more than 18% so far this year. This resurgence in oil prices comes after a period of relative underperformance in the latter half of 2023, highlighting a robust recovery in the energy sector.
High Dividend Yield: A Boon for Investors
The current price levels are particularly beneficial for upstream enterprises and investors in the energy sector. The spike in WTI crude oil prices has not only fostered a favorable environment for oil and energy stocks but also highlighted those with high dividend yields. Companies within the Zacks Oils and Energy sector, for example, have been identified as standout performers, offering lucrative dividends and capitalizing on the surging commodity prices.
3 Stocks to Consider
Shares of oil companies are also gaining. Considering the current elevated oil prices, we have identified three upstream stocks with upward-trending earnings revisions and a dividend yield of more than 2%.
APA Corporation (APA - Free Report) is an independent energy company specializing in the exploration, development and production of natural gas, crude oil and natural gas liquids. With operations spanning the United States, Egypt and the North Sea, APA Corp maintains a strategic focus on these key geographic areas, while exploring opportunities in Suriname and other international locations. The company has a diversified portfolio of conventional and unconventional assets, both onshore and offshore.
The Zacks Rank #3 company’s (Hold) financial performance is closely tied to the fluctuations in oil prices. Higher oil prices can significantly benefit APA Corp by increasing revenues from oil sales, enhancing the profitability of oil extraction operations and making capital investment in new projects more financially viable. Given that a substantial portion of APA's production consists of oil and liquids, which accounted for around 68% of its total proved reserves as of the end of 2023, the company stands to gain from an uptrend in oil market prices, driving stronger cash flow generation and improving its financial metrics.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Murphy Oil Corporation (MUR - Free Report) , a global oil and gas exploration and production company, operates both onshore and offshore, with activities primarily in the United States and Canada. The company split its U.S. downstream business in 2013 to focus on exploration and production.
MUR's operations span significant geographic segments, producing crude oil, natural gas and natural gas liquids. In 2023, its production was notably high, with an average of 192,640 barrels of oil equivalent per day. The company's operations are primarily in the Gulf of Mexico and South Texas within the United States, with additional activities in Canada, Brazil, Mexico, Vietnam and Brunei.
Higher oil prices benefit Murphy Oil by increasing revenues from its oil production, enhancing the company's financial performance, and the ability to invest in further exploration and production activities. The pricing of oil and gas directly influences the Zacks Rank #2 (Buy) company's operational success, cash flows, and capacity to sustain or expand its reserve base, making it sensitive to market price fluctuations.
California Resources Corporation (CRC - Free Report) is an independent oil and natural gas exploration and production, and carbon management company with operations exclusively in California. It is committed to energy transition, boasting some of the lowest carbon intensity production in the United States, and is developing several carbon capture and storage projects within California. As of the end of 2023, CRC had estimated proved reserves of 377 million barrels of oil equivalent (MMBoe), with significant operations in the San Joaquin, Los Angeles, and Sacramento basins, managing 1.7 million net mineral acres.
Higher oil prices directly benefit CRC by increasing the revenue potential from its oil and gas production. Given that 60% of its total production is oil, the company's financial performance is highly sensitive to fluctuations in oil prices. An increase in oil prices can significantly enhance CRC's operating margins and profitability, providing more cash flow that can be used for further development, debt reduction or shareholder returns. Additionally, the Zacks Rank #3 company is well-positioned to capitalize on favorable oil market conditions, with contracts in place for oil delivery that often reference global benchmarks like Brent crude, which command higher prices.