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The Zacks Analyst Blog Highlights: Chevron, Northern Oil and Gas, Parsley Energy, ConocoPhillips and CNOOC
Read MoreHide Full Article
For Immediate Release
Chicago, IL – June 26, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Chevron Corp. (CVX - Free Report) , Northern Oil and Gas, Inc. (NOG - Free Report) , Parsley Energy, Inc. , ConocoPhillips (COP - Free Report) and CNOOC Ltd. (CEO - Free Report) .
OPEC Accord Prompts Rally in Oil Prices: 5 Top Gainers
The OPEC countries have agreed to raise crude oil production but by an amount that appears to be less than market expectations. Such a lesser-than-expected production boost helped oil prices scale north and energy shares end in the green.
Oil prices are expected to climb further in the years ahead as there is a cap on how much Saudi Arabia can produce and it is near the limit. Also, Venezuela’s crude oil output has declined significantly. Meanwhile, production of shale, a substitute for conventional crude oil, has risen by leaps and bounds over the past 10 years.
Banking on this strength in oil prices, investing in sound energy stocks seems prudent.
OPEC Agrees to Smaller-Than-Expected Production
OPEC has decided to raise production; however, the amount seems to be lesser than analysts’ expectations. This has soothed concerns about a crude supply glut in the market. So, how did OPEC react? It said that it would “strive to adhere to the overall conformity level of OPEC-12, down to 100%, as of 1 July 2018”.
The statement clearly means that under the deal inked in November 2016, 12 of the 14 OPEC members at that time agreed to trim output by 1.2 million barrels a day from late-2016 levels. But, it had cut down more than required, resulting in excess output reduction of nearly 624,000 barrels a day. The OPEC members, thus, have now decided to add 624,000 barrels a day into the global market and get back to 100% compliance.
Such an uptick in output, nonetheless, turns out to be less than a likely increase in production by 1 million barrels a day, according to Khalid al-Falih, Saudi Arabia’s energy minister. Nigerian oil minister Ibe Kachikwu added that 1 million-barrel figure would have seen OPEC increasing output by around 700,000 barrels a day, while non-OPEC countries including Russia contributing the rest, according to the Financial Times.
How Did Oil Prices React?
OPEC’s agreement to smaller-than-expected production boost amid a global supply glut helped oil prices scale north. The West Texas Intermediate crude, the U.S. benchmark traded on the New York Mercantile Exchange, jumped by $3.04, or 4.4%, to settle at $68.58 a barrel on Jun 22, its highest finish in nearly a month. The West Texas Intermediate crude finished roughly 5.8% higher last week.
The Brent crude, the global benchmark jumped $2.50, or 3.3%, to reach $75.55 a barrel, rebounding from the prior trading session’s finish at $73.05, which was the lowest for the international benchmark since Apr 17. The Brent crude posted a weekly rise of almost 2.9%.
Factors Beyond OPEC Will Drive Oil Prices
Oil prices, in the meanwhile, are expected to rise as supply growth could face constraints in the near term due to chronic underinvestment in long-term projects by major oil companies in the last three years. And if Saudi Arabia’s intention to increase production level is a concern, one should remember that there is a cap on how much it can produce.
Venezuela’s production level has also gone from bad to worse in the past two months. The country’s output levels have dropped to 1.36 million barrels a day last month, down 600,000 barrels a day from a year ago. The International Energy Agency, in fact, has predicted that the country’s output could fall further to 800,000 barrels per day next year.
By the way, there are chances of a sharp rise in the production of “tight-oil” from shale rocks in the United States. Tight oil production is, currently, at 5 million barrels a day and will propel total U.S. oil output to over 11 million barrels a day, the highest in about 50 years. This is making the United States a significant exporter and in turn will absorb much of the projected growth in demand. Kuwait, Iraq and Iran, in particular, will thus be forced to dump the idea of increasing oil output in the future. Needless to say, shale production in itself is troublemaking for crude oil.
5 Top Energy Players to Buy Now
Shares of oil and gas companies have moved north on the back of a strong rally in oil prices. And with oil poised to gain traction in the near future, such energy companies are expected to rake in profits and reduce debt. The Energy Select Sector SPDR (XLE) gained 2% on Jun 22, while it has advanced 2.3% so far this year (read more: Energy Insiders Are Buying as Oil Prices Face Hard Landing).
Given such positives, we have selected five solid energy companies to add to your portfolio. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Chevron Corp. engages in integrated energy, chemicals, and petroleum operations worldwide. The stock currently has a Zacks Rank #1 and a VGM Score of A. In the last 60 days, seven earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings surged 31.5% in the same period. The company’s expected earnings growth rate for the current year is 130.3% compared with the Oil and Gas - Integrated - International industry’s estimated rally of 13.9%.
Northern Oil and Gas, Inc. engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. The stock currently has a Zacks Rank #1 and a VGM Score of A. In the last 60 days, four earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 38.5% in the same period. The company’s expected earnings growth rate for the current year is 157.1% compared with the Oil and Gas - Exploration and Production - United States industry’s projected rally of 22.7%.
Parsley Energy, Inc. engages in the acquisition, development, production, exploration, and sale of crude oil and natural gas properties in the Permian Basin in West Texas. The stock currently has a Zacks Rank #1 and a VGM Score of B. In the last 60 days, 15 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings jumped 50.4% in the same period. The company’s expected earnings growth rate for the current year is 146.4% compared with the Oil and Gas - Exploration and Production - United States industry’s estimated increase of 22.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids worldwide. The stock currently has a Zacks Rank #2 and a VGM Score of A. In the last 60 days, five earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings climbed 20.2% in the same period. The company’s expected earnings growth rate for the current year is 585% compared with the Oil and Gas - Integrated - United States industry’s estimated rally of 15.7%.
CNOOC Ltd. explores, develops, produces, and sells crude oil, natural gas, and other petroleum products. The stock currently has a Zacks Rank #1 and a VGM Score of A. In the last 60 days, two earnings estimates moved up, while none moved down for the current year. The Zacks Consensus Estimate for earnings rose 22.7% in the same period. The company’s expected earnings growth rate for the current year is 124.3% compared with the Oil and Gas - Integrated - Emerging Markets industry’s projected rally of 57.2%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Chevron, Northern Oil and Gas, Parsley Energy, ConocoPhillips and CNOOC
For Immediate Release
Chicago, IL – June 26, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Chevron Corp. (CVX - Free Report) , Northern Oil and Gas, Inc. (NOG - Free Report) , Parsley Energy, Inc. , ConocoPhillips (COP - Free Report) and CNOOC Ltd. (CEO - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday’s Analyst Blog:
OPEC Accord Prompts Rally in Oil Prices: 5 Top Gainers
The OPEC countries have agreed to raise crude oil production but by an amount that appears to be less than market expectations. Such a lesser-than-expected production boost helped oil prices scale north and energy shares end in the green.
Oil prices are expected to climb further in the years ahead as there is a cap on how much Saudi Arabia can produce and it is near the limit. Also, Venezuela’s crude oil output has declined significantly. Meanwhile, production of shale, a substitute for conventional crude oil, has risen by leaps and bounds over the past 10 years.
Banking on this strength in oil prices, investing in sound energy stocks seems prudent.
OPEC Agrees to Smaller-Than-Expected Production
OPEC has decided to raise production; however, the amount seems to be lesser than analysts’ expectations. This has soothed concerns about a crude supply glut in the market. So, how did OPEC react? It said that it would “strive to adhere to the overall conformity level of OPEC-12, down to 100%, as of 1 July 2018”.
The statement clearly means that under the deal inked in November 2016, 12 of the 14 OPEC members at that time agreed to trim output by 1.2 million barrels a day from late-2016 levels. But, it had cut down more than required, resulting in excess output reduction of nearly 624,000 barrels a day. The OPEC members, thus, have now decided to add 624,000 barrels a day into the global market and get back to 100% compliance.
Such an uptick in output, nonetheless, turns out to be less than a likely increase in production by 1 million barrels a day, according to Khalid al-Falih, Saudi Arabia’s energy minister. Nigerian oil minister Ibe Kachikwu added that 1 million-barrel figure would have seen OPEC increasing output by around 700,000 barrels a day, while non-OPEC countries including Russia contributing the rest, according to the Financial Times.
How Did Oil Prices React?
OPEC’s agreement to smaller-than-expected production boost amid a global supply glut helped oil prices scale north. The West Texas Intermediate crude, the U.S. benchmark traded on the New York Mercantile Exchange, jumped by $3.04, or 4.4%, to settle at $68.58 a barrel on Jun 22, its highest finish in nearly a month. The West Texas Intermediate crude finished roughly 5.8% higher last week.
The Brent crude, the global benchmark jumped $2.50, or 3.3%, to reach $75.55 a barrel, rebounding from the prior trading session’s finish at $73.05, which was the lowest for the international benchmark since Apr 17. The Brent crude posted a weekly rise of almost 2.9%.
Factors Beyond OPEC Will Drive Oil Prices
Oil prices, in the meanwhile, are expected to rise as supply growth could face constraints in the near term due to chronic underinvestment in long-term projects by major oil companies in the last three years. And if Saudi Arabia’s intention to increase production level is a concern, one should remember that there is a cap on how much it can produce.
Venezuela’s production level has also gone from bad to worse in the past two months. The country’s output levels have dropped to 1.36 million barrels a day last month, down 600,000 barrels a day from a year ago. The International Energy Agency, in fact, has predicted that the country’s output could fall further to 800,000 barrels per day next year.
By the way, there are chances of a sharp rise in the production of “tight-oil” from shale rocks in the United States. Tight oil production is, currently, at 5 million barrels a day and will propel total U.S. oil output to over 11 million barrels a day, the highest in about 50 years. This is making the United States a significant exporter and in turn will absorb much of the projected growth in demand. Kuwait, Iraq and Iran, in particular, will thus be forced to dump the idea of increasing oil output in the future. Needless to say, shale production in itself is troublemaking for crude oil.
5 Top Energy Players to Buy Now
Shares of oil and gas companies have moved north on the back of a strong rally in oil prices. And with oil poised to gain traction in the near future, such energy companies are expected to rake in profits and reduce debt. The Energy Select Sector SPDR (XLE) gained 2% on Jun 22, while it has advanced 2.3% so far this year (read more: Energy Insiders Are Buying as Oil Prices Face Hard Landing).
Given such positives, we have selected five solid energy companies to add to your portfolio. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Chevron Corp. engages in integrated energy, chemicals, and petroleum operations worldwide. The stock currently has a Zacks Rank #1 and a VGM Score of A. In the last 60 days, seven earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings surged 31.5% in the same period. The company’s expected earnings growth rate for the current year is 130.3% compared with the Oil and Gas - Integrated - International industry’s estimated rally of 13.9%.
Northern Oil and Gas, Inc. engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. The stock currently has a Zacks Rank #1 and a VGM Score of A. In the last 60 days, four earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 38.5% in the same period. The company’s expected earnings growth rate for the current year is 157.1% compared with the Oil and Gas - Exploration and Production - United States industry’s projected rally of 22.7%.
Parsley Energy, Inc. engages in the acquisition, development, production, exploration, and sale of crude oil and natural gas properties in the Permian Basin in West Texas. The stock currently has a Zacks Rank #1 and a VGM Score of B. In the last 60 days, 15 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings jumped 50.4% in the same period. The company’s expected earnings growth rate for the current year is 146.4% compared with the Oil and Gas - Exploration and Production - United States industry’s estimated increase of 22.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids worldwide. The stock currently has a Zacks Rank #2 and a VGM Score of A. In the last 60 days, five earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings climbed 20.2% in the same period. The company’s expected earnings growth rate for the current year is 585% compared with the Oil and Gas - Integrated - United States industry’s estimated rally of 15.7%.
CNOOC Ltd. explores, develops, produces, and sells crude oil, natural gas, and other petroleum products. The stock currently has a Zacks Rank #1 and a VGM Score of A. In the last 60 days, two earnings estimates moved up, while none moved down for the current year. The Zacks Consensus Estimate for earnings rose 22.7% in the same period. The company’s expected earnings growth rate for the current year is 124.3% compared with the Oil and Gas - Integrated - Emerging Markets industry’s projected rally of 57.2%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.