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Robust Recovery in Oil Price: Shale Producers in the Spotlight

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The pandemic-induced beaten-down energy sector is gradually on the mend as reflected in the massive improvement in crude price over the past several months. With exploration and production activities ramping up steadily, the worst seems to be over for oil.   

Oil Price at Nine-Month High

The price of West Texas Intermediate (WTI) crude has crossed $48 per barrel mark to reach its maximum level since Feb 26. With the approval of coronavirus vaccines across countries, analysts are expecting global fuel demand to witness a significant recovery in 2021. This, in turn, is brightening the crude oil pricing scenario.

An overall optimism that the United States will get lawmakers’ sanction for a fresh round of coronavirus relief package to boost the economy is also bumping up the oil price.  

Moreover, the inventories of U.S. crude oil fell 3.1 million barrels in the week through Dec 11, according to the U.S. Energy Information Administration. Most analysts opine that the U.S. crude inventory draw has been larger than expected, which is also inflating the commodity price.

Shale Players in Spotlight

The robust crude price rebound is a boon for oil explorers and producers operating in the key U.S. shale plays like the Permian Basin and Eagle Ford. Notably, Permian is the most prolific shale play in the United States. With crude price gradually approaching the bullish territory, oil producers already resumed adding rigs to both these shale plays.

Therefore, it seems to be an opportune moment for energy investors to keep an eye on Permian producers. Here, we present one stock that currently sports a Zacks Rank #1 (Strong Buy) while the remaining three presently carry a Zacks Rank #3 (Hold) and are well positioned to gain from the current market dynamics. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Based in Irving, TX, Exxon Mobil Corporation (XOM - Free Report) is among the largest integrated energy companies in the world. The company is prioritizing investments in key resources that include the Permian. This #1 Ranked stock is likely to see earnings growth of more than 480% in 2021.

Diamondback Energy Inc. (FANG - Free Report) , headquartered in Midland, TX, is a leading pure play Permian operator. The stock has witnessed upward earnings estimate revisions for both 2020 and 2021 in the past 30 days. In 2021, this Zacks #3 Ranked upstream firm is likely to see earnings growth of 12.4%.

Domiciled in Dallas, TX, Matador Resources Company (MTDR - Free Report) has a strong footprint in liquids-rich Delaware Basin’s Wolfcamp and Bone Spring plays. The stock with a Zacks Rank of 3 is likely to see earnings growth of 180.9% in 2021.

Midland, TX-based Concho Resources Inc.  conducts operations across the Delaware and the Midland sub-basins of the broader Permian. In the past seven days, the stock has witnessed northbound earnings estimate revisions for 2020 and 2021 each.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


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Exxon Mobil Corporation (XOM) - free report >>

Diamondback Energy, Inc. (FANG) - free report >>

Matador Resources Company (MTDR) - free report >>

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