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WTI Oil Price Nearing USD70 Per Barrel Mark: Boon for ConocoPhillips?

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Key Takeaways

  • WTI oil is trading above $68 per barrel, nearing $70, supporting COP's exploration and production business.
  • COP's low-cost resources in U.S. shale plays like the Permian, Eagle Ford and Bakken drive resilience.
  • COP's 2025 earnings estimate was revised upward as oil prices remain well above its breakeven levels.

The price of West Texas Intermediate (WTI) is currently trading above the $68 per barrel mark, approaching $70 per barrel. The rising price of the commodity, being backed by renewed tensions in the Middle East, is a boon for the exploration and production activities of ConocoPhillips (COP - Free Report) .

The upstream energy major has low-cost resources both internationally and in the United States. ConocoPhillips is more confident in its resources within the United States, which it refers to as the Lower 48, comprising major shale plays like the Permian Basin, Eagle Ford and Bakken. This demonstrates resilience in ConocoPhillips’ business model.

With the oil price significantly higher than the break-even price in the prolific resources, where COP is operating currently, the ongoing pricing environment of the commodity is highly favorable for the company’s overall business, thereby aiding its bottom line.

Is the Current Oil Price Favorable for XOM & EOG’s Businesses?

Exxon Mobil Corporation (XOM - Free Report) and EOG Resources, Inc. (EOG - Free Report) are two leading energy players, having a significant presence in upstream businesses.

XOM has a strong presence in prolific oil and gas resources in the Permian and offshore Guyana. Advantageous volume growth from both resources has been supporting ExxonMobil’s upstream activities, which contribute to the large scale of the company’s total earnings.

Having crude reserves in the United States and Trinidad, EOG Resources is among the energy majors in the domestic market. Having operations in the leading shale plays in the United States, the company is well-positioned to capitalize on the handsome crude prices.

COP’s Price Performance, Valuation & Estimates

Shares of COP have lost 16.3% over the past year compared with the 19.1% decline of the composite stocks belonging to the industry.

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From a valuation standpoint, COP trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 5.17X. This is below the broader industry average of 11.07X.

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The Zacks Consensus Estimate for COP’s 2025 earnings has been revised upward over the past seven days.

Zacks Investment Research Image Source: Zacks Investment Research

COP stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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