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Why You Should Watch EOG, COP, XOM Stocks Amid Rising Oil Prices
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Key Takeaways
Sanctions against Russian oil exports to China and India have pushed oil prices back into bullish territory.
The price of West Texas Intermediate crude is trading above $78 per barrel, the highest since August.
Stocks that look to gain include oil exploration and production companies like ExxonMobil and EOG Resources.
The Biden administration's introduction of new sanctions targeting Russian oil exports to China and India has contributed to a resurgence in oil prices, pushing them back into bullish territory. As a result, exploration and production companies are once again in focus, with EOG Resources, Inc. (EOG - Free Report) , ConocoPhillips (COP - Free Report) and Exxon Mobil Corporation (XOM - Free Report) well-positioned to benefit.
Oil Markets Heat Up as Bulls Take Charge
The price of West Texas Intermediate (WTI) crude is currently trading above $78 per barrel, having recently peaked at $78.58, its highest level since Aug. 15.
The Biden administration has introduced its most extensive sanctions package to date, aimed at curbing Russia's oil and gas revenues. The move is intended to strengthen Kyiv's position and provide leverage for future negotiations toward peace in Ukraine. The incident, which poses a risk to already tightening global supplies, has propelled crude oil prices upward.
Exploration & Production Business to Gain
As oil prices continue to climb, the trend is expected to benefit exploration and production companies, particularly since the breakeven costs in many of the United States' prolific shale plays remain well below current price levels.
Breakeven WTI Price in US Shale Plays
Image Source: Statista
Therefore, it is advisable to focus on major exploration and production companies with significant upstream operations in key shale plays, as they are well-positioned to benefit from rising oil prices.
3 Must-Watch Upstream Stocks: EOG, COP, XOM
EOG Resources
In the United States, EOG Resources, carrying a Zacks Rank #3 (Hold), is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The upstream energy major possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong production outlook amid a handsome crude pricing environment.
ConocoPhillips
Based on production and crude and gas reserves, #3 Ranked ConocoPhillips is among the largest exploration and production players in the world. With its acquisition of Marathon Oil, COP has broadened its key Lower 48 portfolio, enabling it to expand its presence in prolific, low-cost U.S. basins such as Eagle Ford, Bakken, Delaware and Permian, adding more than 2 billion barrels of resources. Thus, the rising oil price is highly favorable for COP’s upstream operations. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ExxonMobil
With a strong focus on strengthening its presence in the Permian – the most prolific basin in the United States – ExxonMobil completed the acquisition of Pioneer Natural Resources Company on May 3. With 1.4 million net acres of the combined company in the Delaware and Midland basins and an estimated 16 billion barrels of oil equivalent resource, ExxonMobil has greatly transformed its upstream portfolio.
Notably, Zacks #3 Ranked ExxonMobil aims to double production in the Permian Basin from current levels to 2.3 million barrels of oil equivalent per day (MMBoE/d) by 2030. Thus, XOM’s overall upstream business is expected to generate handsome cashflows for shareholders, with oil prices remaining in the bullish territory.
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Why You Should Watch EOG, COP, XOM Stocks Amid Rising Oil Prices
Key Takeaways
The Biden administration's introduction of new sanctions targeting Russian oil exports to China and India has contributed to a resurgence in oil prices, pushing them back into bullish territory. As a result, exploration and production companies are once again in focus, with EOG Resources, Inc. (EOG - Free Report) , ConocoPhillips (COP - Free Report) and Exxon Mobil Corporation (XOM - Free Report) well-positioned to benefit.
Oil Markets Heat Up as Bulls Take Charge
The price of West Texas Intermediate (WTI) crude is currently trading above $78 per barrel, having recently peaked at $78.58, its highest level since Aug. 15.
The Biden administration has introduced its most extensive sanctions package to date, aimed at curbing Russia's oil and gas revenues. The move is intended to strengthen Kyiv's position and provide leverage for future negotiations toward peace in Ukraine. The incident, which poses a risk to already tightening global supplies, has propelled crude oil prices upward.
Exploration & Production Business to Gain
As oil prices continue to climb, the trend is expected to benefit exploration and production companies, particularly since the breakeven costs in many of the United States' prolific shale plays remain well below current price levels.
Breakeven WTI Price in US Shale Plays
Therefore, it is advisable to focus on major exploration and production companies with significant upstream operations in key shale plays, as they are well-positioned to benefit from rising oil prices.
3 Must-Watch Upstream Stocks: EOG, COP, XOM
EOG Resources
In the United States, EOG Resources, carrying a Zacks Rank #3 (Hold), is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The upstream energy major possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong production outlook amid a handsome crude pricing environment.
ConocoPhillips
Based on production and crude and gas reserves, #3 Ranked ConocoPhillips is among the largest exploration and production players in the world. With its acquisition of Marathon Oil, COP has broadened its key Lower 48 portfolio, enabling it to expand its presence in prolific, low-cost U.S. basins such as Eagle Ford, Bakken, Delaware and Permian, adding more than 2 billion barrels of resources. Thus, the rising oil price is highly favorable for COP’s upstream operations. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ExxonMobil
With a strong focus on strengthening its presence in the Permian – the most prolific basin in the United States – ExxonMobil completed the acquisition of Pioneer Natural Resources Company on May 3. With 1.4 million net acres of the combined company in the Delaware and Midland basins and an estimated 16 billion barrels of oil equivalent resource, ExxonMobil has greatly transformed its upstream portfolio.
Notably, Zacks #3 Ranked ExxonMobil aims to double production in the Permian Basin from current levels to 2.3 million barrels of oil equivalent per day (MMBoE/d) by 2030. Thus, XOM’s overall upstream business is expected to generate handsome cashflows for shareholders, with oil prices remaining in the bullish territory.