3 Top Oil Stocks For Your January 2022 Watchlist
Oil stocks have been heating up in the stock market lately. Needless to say, the performance of oil stocks would go hand in hand with oil prices that are trading near their highest level since the initial Omicron scare back in November 2021. This is largely due to the fact that the Omicron variant has not affected fuel demand the way previous variants did. The Federal Reserve Chairman Jerome Powell also said on Tuesday that the economy should weather the current coronavirus crisis with only “short-lived” impacts.
Furthermore, the U.S. Energy Information Administration expects global consumption of petroleum and liquid fuels to increase by 3.6 million barrels/day this year. Lastly, OPEC’s indecision regarding production and the rate at which the U.S. oil and natural gas producers will increase drilling also played a factor.
With that said, it is not surprising why oil stocks are skyrocketing right now. Take Diamondback Energy (NASDAQ: FANG) and Chevron (NYSE: CVX) for example. On one hand, FANG stock has nearly doubled its value over the past year. Meanwhile, CVX stock has seen gains of more than 35% over the same period. So, now begs the question, can this trend continue? Well, if you believe so, then here is a list of top oil stocks to watch the stock market today.
Best Oil Stocks To Watch Right Now
First, on the list, we have a company that specializes in the energy business, Exxon Mobil. The company’s segments include Upstream, Downstream, Chemical, and Corporate and Financing. On one hand, its Upstream segment covers the exploration and production of crude oil and natural gas. On the other hand, its Downstream segment manufactures, trades, and sells petroleum products. Impressively, XOM stock has been picking up momentum lately, rising more than 10% since the start of the year. Let us see what has been the catalyst for the company’s recent momentum.
Yesterday, the company announced that it is expanding its interest in biofuels that can help reduce greenhouse gas emissions in the transportation sector. Exxon will be acquiring a 49.9% stake in Biojet AS, a Norwegian biofuels company. Biojet plans to convert forestry and wood-based construction waste into lower-emissions biofuels and biofuel components. Thus, the company plans to develop up to five facilities to fuel this initiative. Exxon will then be able to purchase as much as 3 million barrels of the products per year.
Furthermore, Exxon also recently launched the sale of shale gas properties in the Appalachian basin of Ohio. The property stretches across 27,000 acres of space and has 61 wells that produced around 81 million cubic feet per day equivalent of natural gas last year. Not to mention, the sale includes another 274 wells operated by other companies. Now, this is part of the company’s ongoing divestiture of U.S. assets. This comes as it focuses on developments in Guyana, offshore Brazil, and Texas’s Permian Basin shale field. Given these developments, would you consider XOM stock a top oil stock to watch?
Source: TD Ameritrade TOS
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Next, we will be looking at another top oil company, Marathon Petroleum. Unlike Exxon that dwells in both upstream and downstream operations, Marathon is a downstream energy company. In detail, it operates through two segments, Refining & Marketing and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks. Meanwhile, its Midstream segment transports, stores, distributes and markets crude oil and refined products for the Refining & Marketing segment. Riding on the industry’s momentum, MPC stock has risen by almost 60% over the past year.
In December, the company along with ADM (NYSE: ADM) announced the closing of their joint venture. The partnership aims to produce soybean oil to supply the growing demand for renewable diesel fuel. Hence, the joint venture named Green Bison Soy Processing will own and operate a soybean processing complex in Spiritwood, North Dakota. We can expect the facility to be completed by 2023 and it will supply the resulting soybean oil exclusively to Marathon.
Financially, Marathon has also been making meaningful strides. During the company’s third quarter, it reported a net income of $694 million, in comparison with a net loss of $886 million in the previous year’s quarter. Safe to say, Marathon appears to be trending in the right direction. With that in mind, would you consider investing in MPC stock ahead of its fourth-quarter earnings on February 2, 2022?
Source: TD Ameritrade TOS
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ConocoPhillips is an independent exploration and production company. The company explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids. With operations in 14 countries around the world, while boasting $87 billion of total assets, ConocoPhillips is a force to be reckoned with in the oil and gas industry. Similar to many oil stocks right now, COP stock has been on a strong bullish trend. Any investor who jumped in a year ago would have seen gains of over 75% by now.
Last month, it finally announced the completion of its acquisition of Shell Enterprises’ Delaware basin position for $9.5 billion in cash. For those unaware, the assets include approximately 225,000 net acres and producing properties located in Texas. In addition, there are also more than 600 miles of operated crude, gas, and water pipelines and infrastructure. These additions would improve the company’s underlying business drivers, expand its cash from operations, and enhance its ability to deliver higher returns. So, it goes without saying that this acquisition caps off an exceptional year for the company.
Well, ConocoPhillips is yet another oil company that will be announcing its fourth-quarter financials soon, on February 3. During the third quarter, the company reported earnings of $2.4 billion, compared with an adjusted loss of $0.3 billion in the same period last year. Not to mention, it also delivered strong operational performance across its asset base which resulted in third-quarter production of 1,507 thousand barrels of oil equivalent per day. All things considered, would you be eyeing COP stock right now?
Source: TD Ameritrade TOS
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