The oil sector, encompassing companies involved in the exploration, extraction, refining, and distribution of oil, is a fundamental component of the global economy. This sector includes a range of companies from giants in oil production to smaller, specialized firms. The oil industry is crucial for meeting the world’s energy demands. It is known for its cyclical nature, with profitability often linked to the fluctuating prices of crude oil.
Investing in oil stocks can offer significant advantages. These stocks tend to provide lucrative returns when oil prices are high, benefiting from the industry’s demand dynamics. Additionally, they often pay dividends, making them attractive to income-focused investors. However, there are notable disadvantages. The oil market is highly volatile, influenced by geopolitical events, global demand-supply imbalances, and environmental policies. This volatility can lead to substantial price fluctuations in oil stocks.
For investors, understanding the complexities of the oil market is essential. While oil stocks can be a valuable part of a diversified portfolio, they require careful monitoring due to their sensitivity to external factors. An informed approach, considering global economic trends and energy policies, is crucial. Bearing that in mind, let’s look at three oil stocks to watch in the stock market right now.
Oil Stocks To Invest In [Or Avoid] In 2024
- Exxon Mobil Corporation (NYSE: XOM)
- Occidental Petroleum Corporation (NYSE: OXY)
- Devon Energy Corporation (NYSE: DVN)
Exxon Mobil (XOM Stock)
Kicking things off, Exxon Mobil Corporation (XOM) is one of the world’s largest publicly traded international oil and gas companies. The company engages in the exploration, production, and sale of crude oil and natural gas. Exxon Mobil also operates in the manufacturing of petroleum products and the transportation of oil, gas, and related products.
Earlier this month, Exxon Mobil announced an update to its Corporate Plan, projecting significant growth in earnings and cash flow through 2027. Since 2019, the company has added about $10 billion annually to its earnings, with plans to grow this by $14 billion from year-end 2023 through 2027. This growth is underpinned by reducing costs, increasing production from cost-efficient assets, and focusing on high-value chemicals and lower-emission fuels. The plan also includes doubling upstream earnings by 2027 compared to 2019. Additionally, the company’s oil and gas production is expected to rise to 4.2 million barrels per day by 2027.
Year-to-date, Exxon Mobil stock is down by 4.11%. Moreover, during Wednesday’s late morning trading session, shares of XOM stock are trading flat on the day so far, at $102.09 a share.
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Occidental Petroleum (OXY Stock)
Next, Occidental Petroleum Corporation (OXY) is an international oil and gas exploration and production company. Occidental primarily focuses on hydrocarbon exploration but also has operations in petrochemicals and midstream assets.
Just this month, Occidental announced its acquisition of CrownRock L.P. for approximately $12.0 billion, enhancing its operations in the Permian Basin. The acquisition adds significant production capabilities, with an expected output of around 170 thousand barrels per day in 2024. This move is set to boost Occidental’s free cash flow and complement its existing portfolio in the Midland Basin.
In 2023, shares of OXY stock are up slightly by 0.43% year-to-date. Meanwhile, during Wednesday’s late morning trading session, Occidental Petroleum stock is trading red by 0.23% at $61.30 a share.
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Devon Energy (DVN Stock)
To wrap up, Devon Energy Corporation (DVN) is an American independent natural gas, natural gas liquids, and petroleum exploration company. Devon Energy focuses on onshore exploration and production in the United States. The company has significant operations in various key U.S. oil and gas-producing regions.
Last month, Devon Energy reported better-than-expected third-quarter 2023 financial results. In detail, the company announced earnings of $1.65 per share, with revenue of $3.84 billion for Q3 2023. This is versus Wall Street’s consensus estimates which were an EPS of $1.56 and revenue estimates of $3.54 billion.
Year-to-date, Devon Energy stock has fallen by 19.86% year-to-date. While, during Wednesday’s late morning trading action, shares of DVN stock are trading modestly lower by 0.21% at $46.56 per share.
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