Oil stocks to buy as crude prices plummet:
- Exxon Mobil Corp. (XOM)
- Chevron Corp. (CVX)
- Apache Corp. (APA)
- Noble Energy (NBL)
- Devon Energy Corp. (DVN)
- Marathon Petroleum Corp. (MPC)
- Phillips 66 (PSX)
Oil and gas are attractive sectors to both day traders and long term investors as they provide active and liquid markets and can also serve as a portfolio diversifier and inflation hedge.
Low crude oil prices are likely to remain for the rest of 2020, but energy companies with manageable debt levels and cash flow could be good additions to a portfolio. While oil prices have rebounded off their historic lows, investors can still buy energy stocks at a massive discount.
Exxon Mobil reported total debt of almost $50 billion at the end of 2019. However, the company's debt-to-capitalization was low at 19%. Even after the recent rating downgrade by S&P Global, Exxon Mobil still commands an investment-grade rating of AA.
| Stocks with the Most Momentum |
|---|
| Price ($) | 12-Month Trailing Total Return (%) |
| Newmont Corp. (NEM) | 62.67 | 102.0 |
| Advanced Micro Devices Inc. (AMD) | 55.51 | 99.1 |
| MarketAxess Holdings Inc. (MKTX) | 441.43 | 64.8 |
If you choose to buy futures or options directly in oil, you will need to trade them on a commodities exchange. The more common way to invest in oil for the average investor is to buy shares of an oil ETF. Finally, you can also invest in oil through indirect exposure by owning various oil companies.
Our Advisor's Choice
| Stock Name | Qty | Price |
|---|
| HDFC Bank | 100 | 2523.25 |
| LIC INDIA | 100 | 2523.25 |
| INFY | 100 | 2523.25 |
| Total |
In 2014, petroleum and natural gas were the two largest sources of energy in the
U.S., together providing 63 percent of the energy consumed (
oil provided 35 percent and gas 28 percent).
Service companies.
| Rank | Company | Million Bbl/Year |
|---|
| 1 | BP | 237.0 |
| 2 | Chevron | 177.0 |
| 3 | ConocoPhillips | 153.0 |
| 4 | Exxon Mobil | 112.0 |
The top five oil-generating countries are as follows:
- United States. The United States is the top oil-producing country in the world, with an average of 17.87 million b/d, which accounts for 18% of the world's production.
- Saudi Arabia.
- Russia.
- Canada.
- China.
BP splashed out $10.5 billion on a string of US shale assets from BHP Group in 2018 while Shell splurged over $50 billion on BG Group in 2016. At the end of 2019, BP had $43.5 billion worth of net debt with gearing of 31.1%, while Shell had $79.1 billion and gearing of 29.3%.
Now for some hard numbers. In its latest Statistical Review of World Energy, BP estimated the world had 1.7297 trillion barrels of crude oil remaining at the end of 2018. That was up from 1.7275 trillion barrels a year earlier and 1.4938 trillion barrels in 2008.
The top five oil-generating countries are as follows:
- United States. The United States is the top oil-producing country in the world, with an average of 17.87 million b/d, which accounts for 18% of the world's production.
- Saudi Arabia.
- Russia.
- Canada.
- China.
The largest sources of U.S. imported oil were: Canada (40%), Saudi Arabia (11%), Venezuela (9%), Mexico (8%), and Colombia (4%). According to the American Petroleum Institute, the oil and natural gas industry supports nine million U.S. jobs and makes up seven percent of the nation's gross domestic product.
In a merger completed February 1, 2000, Illinova Corp. became a wholly owned subsidiary of Dynegy Inc. and Chevron's stake increased up to 28%. However, in May 2007, Chevron sold its stake in the company for approximately $985 million, resulting in a gain of $680 million.
Around 100 million years ago the region was covered by what scientists call the Tethys Ocean. Rivers feeding this ancient ocean saturated it with nutrients, giving rise to massive numbers of microscopic animals destined to be pressure cooked into oil.
Saudi Aramco
Many would consider Saudi Arabia the undisputed king of oil and gas. The desert kingdom has around 16% of the world's proven oil reserves and is the biggest global exporter of petroleum liquids.Net income for 43 U.S. oil producers totaled $28 billion in 2018, a five-year high. Based on net income, 2018 was the most profitable year for these U.S. oil producers since 2013, despite crude oil prices that were lower in 2018 than in 2013 on an annual average basis.
No one can predict the future, but sustained low prices are likely to have a lasting impact on the US oil industry. IHS Markit suggests US oil production could decline by 3 million barrels per day to 10 million by the end of this year, and could decline further to 9 million barrels per day in 2021.
7 Stocks That Could Ride Out the Turmoil in Energy Markets
| Refining | Recent Price | Dividend Yield |
|---|
| Phillips 66 / PSX | $48.95 | 7.4% |
| Valero Energy / VLO | 43.72 | 9.0 |
All told, global investments in exploration and production are expected to fall in 2020 by $100 billion, or 17 percent below last year, according to Rystad Energy, a research and consulting firm based in Oslo. That drop is only the latest jolt to an industry that has been tightening budgets for years.
Corporate Debt Kings: The World's Most Indebted Companies 2020
- AT&T.
- Softbank.
- Pemex.
- Comcast.
- Anheuser-Busch InBev.
- Ford Motor Company.
- Verizon.
- Apple.
North American oil exploration and production companies have $86 billion in debt that will mature between 2020 and 2024, and pipeline companies have an additional $123 billion in debt coming due over the same period, according to Moody's.
China owns about $1.1 trillion in U.S. debt, or a bit more than the amount Japan owns.
Corporate Debt Kings: The World's Most Indebted Companies 2020
- Pemex.
- Comcast.
- Anheuser-Busch InBev.
- Ford Motor Company.
- Verizon.
- Apple.
- General Electric.
- Evergrande Group.
Leading U.S. oil and gas companies
Oil and gas companies from the United States are among the world's largest corporations. For example, ExxonMobil, ConocoPhillips, and Chevron have all long been global leaders based on revenue.With rising global demand, highly volatile prices and increasingly stringent environmental regulations, the oil and gas industry faces three major challenges : reduce costs, optimize the performance of its industrial base assets and improve its environmental footprint.
