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Crude Prices Stay Above $90: Are MTDR, SM and BP Poised for Gains?
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Key Takeaways
MTDR could benefit from higher crude prices, supported by oil-weighted output and Delaware Basin growth.
SM is strengthening its portfolio through the Civitas merger, boosting shale assets and cash flow potential.
BP is expanding upstream production with multiple major projects underway through 2027.
The conflict between the United States and Iran over the past month has rattled global commodity markets, with benchmark oil prices surging to nearly $100 per barrel. Following the recent announcement of a two-week ceasefire, oil prices have eased slightly, though they still remain above pre-war levels. While ceasefire talks between the United States and Iran are due, the situation in the Middle East remains uncertain.
Geopolitical tensions in the Middle East have significantly disrupted oil flows through the Strait of Hormuz, which is one of the most crucial oil chokepoints globally and accounts for approximately one-fifth of the world’s total oil flows. The conflict has prompted several oil-producing companies in the Middle East to curb their production levels due to damage to key energy infrastructure. These developments have pushed benchmark oil prices above $90 per barrel.
3 Upstream Players to Gain: MTDR, SM and BP
While this sudden increase may have ramifications for the global economy, certain oil and gas companies like Matador Resources (MTDR - Free Report) , SM Energy (SM - Free Report) and BP plc (BP - Free Report) are expected to benefit from the rise in commodity prices.
Matador Resources is primarily involved in exploration and production activities, particularly in the prolific Delaware Basin of the United States. The company intends to grow its oil production by 3% in 2026, and its upcoming wells are expected to deliver over 50% returns, with production potential exceeding 1 million barrels of oil equivalent each. These wells are expected to support strong growth into 2026. Since the company’s overall production is mainly oil-weighted, it is expected to significantly benefit from the rise in crude prices.
SM Energy owns attractive oil and gas assets across the Permian Basin, Uinta Basin and Eagle Ford regions. The company’s merger with Civitas Resources, announced at the end of the third quarter of 2025, is expected to strengthen its earnings and cash flows. The combination of the two companies has given rise to a high-quality portfolio of assets across highly productive U.S. shale basins, particularly weighted toward the Permian Basin. The company’s oil-focused operations in the shale basins of the United States are expected to gain from increased crude prices.
BP is taking significant steps to increase its upstream production. The company started seven major upstream projects in 2025, including Cypre in Trinidad, Raven Infills in Egypt, the GTA in Mauritania and Senegal, the Atlantis Drill Center 1 expansion project in the US Gulf of America, with several more expected to start in 2026 and 2027. BP’s upstream activities have substantial exposure to rising oil prices and are expected to support higher profits and cash flows.
Time to Buy or Wait?
The current commodity price environment remains particularly favorable for upstream companies, especially those with oil-weighted production. The elevated oil price is expected to generate higher profits from their upstream operations, supporting stronger cash flows and improving balance sheet strength.
Given the current business environment, investors should consider owning these stocks at present. MTDR, SM and BP currently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Crude Prices Stay Above $90: Are MTDR, SM and BP Poised for Gains?
Key Takeaways
The conflict between the United States and Iran over the past month has rattled global commodity markets, with benchmark oil prices surging to nearly $100 per barrel. Following the recent announcement of a two-week ceasefire, oil prices have eased slightly, though they still remain above pre-war levels. While ceasefire talks between the United States and Iran are due, the situation in the Middle East remains uncertain.
Geopolitical tensions in the Middle East have significantly disrupted oil flows through the Strait of Hormuz, which is one of the most crucial oil chokepoints globally and accounts for approximately one-fifth of the world’s total oil flows. The conflict has prompted several oil-producing companies in the Middle East to curb their production levels due to damage to key energy infrastructure. These developments have pushed benchmark oil prices above $90 per barrel.
3 Upstream Players to Gain: MTDR, SM and BP
While this sudden increase may have ramifications for the global economy, certain oil and gas companies like Matador Resources (MTDR - Free Report) , SM Energy (SM - Free Report) and BP plc (BP - Free Report) are expected to benefit from the rise in commodity prices.
Matador Resources is primarily involved in exploration and production activities, particularly in the prolific Delaware Basin of the United States. The company intends to grow its oil production by 3% in 2026, and its upcoming wells are expected to deliver over 50% returns, with production potential exceeding 1 million barrels of oil equivalent each. These wells are expected to support strong growth into 2026. Since the company’s overall production is mainly oil-weighted, it is expected to significantly benefit from the rise in crude prices.
SM Energy owns attractive oil and gas assets across the Permian Basin, Uinta Basin and Eagle Ford regions. The company’s merger with Civitas Resources, announced at the end of the third quarter of 2025, is expected to strengthen its earnings and cash flows. The combination of the two companies has given rise to a high-quality portfolio of assets across highly productive U.S. shale basins, particularly weighted toward the Permian Basin. The company’s oil-focused operations in the shale basins of the United States are expected to gain from increased crude prices.
BP is taking significant steps to increase its upstream production. The company started seven major upstream projects in 2025, including Cypre in Trinidad, Raven Infills in Egypt, the GTA in Mauritania and Senegal, the Atlantis Drill Center 1 expansion project in the US Gulf of America, with several more expected to start in 2026 and 2027. BP’s upstream activities have substantial exposure to rising oil prices and are expected to support higher profits and cash flows.
Time to Buy or Wait?
The current commodity price environment remains particularly favorable for upstream companies, especially those with oil-weighted production. The elevated oil price is expected to generate higher profits from their upstream operations, supporting stronger cash flows and improving balance sheet strength.
Given the current business environment, investors should consider owning these stocks at present. MTDR, SM and BP currently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.