4 overvalued oil stocks to avoid as OPEC pledges to increase production by StockNews

With the settlement of a disagreement between Saudi Arabia and the United Arab Emirates, an OPEC + deal to increase production was reached earlier this week. Following the deal, oil prices fell by around 8%. Given that the decline in global demand could lead to a further fall in oil prices, we believe Chevron (CLC), Pioneer of natural resources (PXD), Phillips 66 (NYSE 🙂 and Valero Energy (VLO), which are trading at high valuations, may soon see prices pull back. Let’s discuss. On July 18, OPEC + announced its intention to increase production by 400,000 barrels per day from August, after a week of internal conflict. The predicted increase in supply, coupled with declining market demand amid a slowing economic recovery and growing concerns over the rapid spread of the COVID-19 Delta variant, has caused prices to drop. of oil lately.

West Texas Intermediate crude futures fell below the critical $ 70 level on July 19. Oil prices in the United States settled at $ 66.42 per barrel on the same day, hitting a 10-month low. The gradual easing of supply brakes should continue to put pressure on oil prices.

Oil prices are expected to decline further in the near term as global demand decelerates with the resurgence of COVID-19 cases in several countries. Against this backdrop, oil stocks Chevron Corporation (NYSE :), Pioneer Natural Resources Company (NYSE :), Phillips 66 (PSX) and Valero Energy Corporation (NYSE :), which are currently trading at high valuations, may soon experience a recoil. . So, we believe that it is better to avoid these actions now.

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