Oil stocks: 3 oil stocks to watch after Biden’s exit plan
Last month, US President Joe Biden authorized the release of 50 million barrels of crude oil from US strategic reserves. It was an unusual move, but one Biden made to help lower energy prices as winter approaches and Americans struggling with rising costs due to high inflation.
Before Biden announced the publication, oil prices had reached a three-year high of over $ 86 a barrel. The price of Brent crude oil has since fallen to just over $ 70 a barrel, suggesting that Biden’s plan is having an immediate impact (the Omicron variant of Covid-19 has also affected oil prices).
However, the strategic release put pressure on oil producers and put the U.S. government at odds with the Organization of the Petroleum Exporting Countries (OPEC +) and allies such as Russia who are a de facto cartel and have rejected the repeated calls from Washington, DC to pump more oil and increase global production as the winter months approach.
Here are three oil stocks to watch following Biden’s exit plan.
Oil stocks to watch: ExxonMobil (XOM)
We’ll start with America’s largest oil producer, ExxonMobil, based in Irving, Texas. One of the largest companies in the world with annual sales of nearly $ 180 billion and 72,000 employees worldwide. In 2020, ExxonMobil produced on average more than 2.3 million barrels of oil per day, behind only Saudi Aramco and PetroChina (NYSE:RPT) in terms of production.
With brands that include Mobil and Esso, ExxonMobil is a force in the global oil and gas industry, with a global footprint. Since 2015, the company has discovered 18 oil fields off the coast of Guyana in South America which collectively hold more than eight billion barrels of oil.
In terms of stock, after a tough 2020, XOM shares have risen 51% year-to-date and are now trading at just over $ 62 each.
Then we come to America’s second largest oil company and the only one owned by famed investor Warren Buffet, Chevron.
Headquartered in San Ramon, California, Chevron today has operations in 180 countries around the world and is involved in all aspects of the petroleum industry, from exploration and extraction to refining and transportation.
It is Chevron’s diversification within the industry that would be what Buffett enjoys about the business. In fact, the “Oracle of Omaha” increased its stake in CLC shares during the third quarter of this year. Year-to-date, Chevron stock is up 40% to $ 118.30. While most of these gains were made in the first quarter, over the past six months the stock price has risen 9%.
Oil stocks to watch: Shell (RDS.A)
The company has removed “Royal Dutch” from its name, but Shell remains the largest oil company and company in all of Europe. Now co-headquartered in The Hague, the Netherlands and London, England. Following a tax skirmish with the Dutch government, Shell now produces around two million barrels of oil per day.
Like Chevron, Shell is involved in both upstream and downstream aspects of the petroleum industry with 86,000 employees worldwide. As mentioned, Shell has undergone several brand and corporate changes this year after battling with the Dutch government over royalties and was accused of hiding billions of dollars in offshore tax havens. Year-to-date, RDS.A stock is up 27% to $ 45 per share, including a 10% gain in the past six months.
At the date of publication, Joël Baglole did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.
Joel Baglole has been an economic journalist for 20 years. He spent five years as a reporter for the Wall Street Journal and also wrote for The Washington Post and Toronto Star newspapers, as well as for financial websites such as The Motley Fool and Investopedia.