Any time OPEC gets a little feisty, it’s an ideal time to starte looking for oil stocks to buy, and that’s where we are today, with plenty of oil stocks to buy ripe for you to add your positions – or even start a new one.
OPEC controls more than 80% of the global oil reserve, so it has an undeniable voice in the oil supply. When OPEC wants the oil price to go up, it cuts supply. And when it’s comfortable putting more supply on the market, then the price of oil will go down accordingly. It’s the simple law of price and demand.
So earlier this month, OPEC flexed that muscle and announced cuts by Saudi Arabia of 500,000 barrels a day, Iraq by 211,000 daily barrels. Analysts said the cuts indicate that OPEC wants to keep the oil price north of $90 per barrel.
Will that deter summer travelers in the U.S.? Not likely. Oil companies look to be in excellent shape this spring as the price of oil stays elevated. It’s time to use the Portfolio Grader to identify the best oil stocks to buy this spring.
|CLMT||Calumet Specialty Products Partners||$16.66|
Occidental Petroleum (OXY)
Occidental Petroleum (NYSE:OXY) isn’t the biggest oil stock out there, with a market capitalization of more than $57 billion.
What sets it apart is that it’s much more than an oil stock. It has reserves of natural gas and natural gas liquids that nearly equals its oil holdings.
And second, Occidental is positioning itself for continued profitability long after the second quarter is over. It’s working on building out carbon capture technology, including a plant in Texas scheduled to open next year, that will scrub the air of carbon dioxide that’s the equivalent of the emissions of 111,000 vehicles. That technology will be important as companies and nations try to remain carbon-neutral. If Occidental is scrubbing the air of carbon dioxide, it can invest more in fossil fuels.
Earnings for the fourth quarter included revenue of $8.22 billion, an increase of 3.8% from a year ago.
OXY stock is up 7% over the last month and has a “B” rating in the Portfolio Grader.
Exxon Mobil (XOM)
If you want one of the big oil stocks to buy, look no further than Exxon Mobil (NYSE:XOM). With a market cap of $450 billion, Exxon is a multinational oil and gas company looking to get even bigger.
The Wall Street Journal reported that Exxon was in preliminary discussion with Pioneer Natural Resources (NYSE:PXD), which has a market cap of $49 billion. If the deal goes through, it would be the company’s most significant move since Exxon and Mobil merged in 1999.
Exxon can afford the deal because it’s been a dominant oil stock. Last year the company brought in $55.7 billion in profits, a company record, thanks to high oil prices. And with OPEC’s recent move, those prices will stay elevated.
Exxon’s fourth quarter included revenue of $95.43 billion and earnings per share of $3.40, better than analysts’ expectations. XOM stock has a “B” rating in the Portfolio Grader.
ConocoPhillips (NYSE:COP) does it all. The company has upstream, midstream and downstream operations. It’s the largest producer of crude oil in Alaska – and an essential resource for the U.S. to reduce its reliance on OPEC’s whims.
The company has been in the news lately, as environmental groups are fighting the Biden administration’s decision to allow ConocoPhillips to proceed with its $7 billion Willow project in Alaska. And while other oil companies are passing on Alaska oil, ConocoPhillips is committing to those assets.
Earnings in the fourth quarter were strong, with revenue of $19.1 billion, an increase of 23% from a year ago.
Environmentalists won’t be happy, but the Willow project will give COP investors something to smile about for the next several years – estimates are Willow will produce 576 million barrels of oil over the next 30 years.
COP stock is up 2% over the last month and has a “B” rating in the Portfolio Grader.
Calumet Specialty Products Partners (CLMT)
When looking for oil stocks to buy, you should look beyond the traditional oil and gas producers. Sometimes you can find some exciting names in out-of-the-way places.
That brings us to Calumet Specialty Products Partners (NASDAQ:CLMT). Headquartered in Indianapolis, Calumet produces base oils, specialty oils, esters and fuels. It also makes lubricants and greases under the Bel-Ray brand and Royal Purple-branded lubricants, among other products.
The company recently completed a $90 million expansion of its oil refinery in Great Falls, Montana, which could allow it to be the biggest producer of sustainable aviation fuel in the U.S.
Earnings for the fourth quarter were $999.8 million – and while that narrowly missed the $1 billion mark, it still increased 15.5% from a year ago.
Calumet stock is roughly flat this year, but I expect the second quarter to be much improved CLMT stock has a “B” rating in the Portfolio Grader.
Shell (NYSE:SHEL) is a more traditional oil and gas stock. But you may not be familiar with the ticker because it’s still relatively new.
Until last year, Shell was better known as Royal Dutch Shell, but it changed its name and ticker when the company relocated from the Hague to London.
Like other names on this list, Shell works with traditional oil and gas and green energy. The company plans to build the largest renewable hydrogen plant in Europe, which is expected to be operational in 2025.
Earnings in the fourth quarter were solid, with revenue of $101.3 billion, up 18% from a year ago. And things are also looking rosy for the company’s first-quarter earnings report. Shell announced that it expected its performance in the first three months of 2023 to be “significantly higher” than Q4 2022.
The stock jumped on that report, but I won’t be surprised to see another one when the company announces earnings in May.
SHEL stock has a “B” rating in the Portfolio Grader.
It’s hard not to think about Exxon without considering Chevron (NYSE:CVX). While it’s not quite as big as Exxon, it still has a global reach with a huge market cap of more than $300 billion.
Chevron enjoyed huge revenues in 2022, bringing in $246 billion, roughly 50% more than a year ago. Profits doubled on a year-over-year basis to $35.5 billion.
What I appreciate is that Chevron did a great job of taking care of its shareholders by spreading the wealth. It issued $11 billion in dividends, and it spent another $11.25 billion in share buybacks.
Analysts are forecasting Chevron to report revenues of $49.8 billion when it reports earnings at the end of the month and earnings per share of $3.46. Chevron has a pretty consistent history of beating estimates, so I wouldn’t be surprised when it does so again.
CVX stock has a “B” rating in the Portfolio Grader.
I’ve already put BP (NYSE:BP) on my list of stocks to buy this month. And there’s nothing I’ve seen in the last few trading cycles would get me to change my mind.
Like Chevron, BP had a great year last year, setting a company record for profits of $27.7 billion.
Now it’s putting that money to use. It bought a 40% stake in a U.K. carbon capture project from Harbour Energy (OTCMKTS:HBRIY), adding to BP’s impressive effort to reduce carbon emissions.
And it will complete its purchase of TravelCenters of America (NYSE:TA) later this year, adding nearly 300 more fuel stations to its footprint in 44 states.
BP’s revenue in the fourth quarter was $69.3 billion, an increase of 37% from a year ago. The stock is up 14% this year and has an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier held OXY, XOM, COP, SHEL and BP. He did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
On the date of publication, the InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.