Oil stocks are the cheapest stocks on the market

Billionaire David Tepper, who heads hedge fund Appaloosa Management, this week added another voice to the growing chorus of bullish analysts and investors on oil and oil stocks.

At Robin Hood’s online investor conference, also attended by Saudi Energy Minister Prince Abdulaziz bin Salman, Tepper said he has long been among oil stocks, which are currently the least expensive stocks. dear. This is because of the public’s aversion to oil stocks as society and investors push for environmental, social and governance (ESG) investments, Tepper said at Wednesday’s conference, Bloomberg reports.

Tepper quoted Western Oil as a particularly cheap stock, and he thinks stocks have the potential to drop from $ 30 each now to $ 45-50 a share.

What’s more, ExxonMobil was a must move on the day activist investor Engine No. 1 won seats on the board of directors of the US supermajor in late May at a pivotal moment for Big Oil, Tepper told the conference, according to Bloomberg. An investor demanding a change in how America’s largest oil company plans for the future and the energy transition signals that oil supply will eventually decline, the hedge fund veteran said.

Tepper’s Appaloosa Management increased its energy bets in the first quarter of this year, while cutting some positions in the tech sector, the billionaire told CNBC in March.

Tepper is the latest voice in the market to express optimistic views on oil and oil stocks.

David Tawil, chairman of Maglan Capital, told Fox Business on Wednesday that “incredible demand”, inflation and shareholder pressure on big oil companies to dramatically cut emissions could lead to an oil crisis within three years, with very high oil and gasoline prices. Oil prices are expected to rise “steadily and dramatically through the end of the year,” Tawil said.

The world’s largest independent commodities traders are also bullish, not ruling out $ 100 worth of oil.

While oil may not be heading into a new supercycle, prices still have room to rise from current levels due to a strong rebound in demand and an expected tightening in supply. , said senior executives from Trafigura, Vitol and Glencore at the FT Commodities Global Summit earlier this year. the week.

By Tsvetana Paraskova for OilUSD

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Felix J. Dixon