Four U.S. Oil Stocks In Buy Range As Crude Prices Rise

Several top U.S. oil stocks were in buy ranges Tuesday as crude oil prices rose amid OPEC+ production disruptions.


Diamondback Energy (FANG), EOG Resources (EOG), Pioneer Natural Resources (PXD), and Diamondback subsidiary Viper Energy Partners (VNOM) are all in buy ranges. While Matador Resources (MTDR) is near a buy point.

Oil prices rallied Tuesday, as the U.S. Energy Information Administration delivered a bullish view on global oil demand in its latest Short Term Energy Outlook, released on Tuesday. But it also expects supply to increase as it sees U.S. oil production averaging a record-high 12.4 million barrels per day in 2023.

Europe’s Brent crude benchmark rose 3.4% on Tuesday to $83.64 per barrel. U.S. crude jumped 43.9% to $81.29. Natural gas futures gained 3.5%.

“We expect global demand for petroleum products to return to and surpass pre-pandemic levels this year, but crude oil production grows at a faster rate in our forecasts,” said EIA Acting Administrator Steve Nalley. “We expect that as crude oil production increases, inventories will begin to replenish and help push prices lower for gasoline, jet fuel, and other products in the short term.”

The EIA, the information arm of the U.S. Energy Department, will report weekly U.S. stockpile and production data Wednesday morning.

U.S. Oil Stocks In Buy Range

Among top U.S. oil stocks, Diamondback shares rose 2.5% to 124.36 on the stock market today. That put the U.S. shale producer just beyond a buy range after breaking out of a consolidation with a 117.81 entry point.

EOG climbed 4.2% to 102.20. The stock is nearing the top of a buy range after breaking out of a cup base with a 98.30 entry point. The buy range runs to 103.22. The stock has a 99 Composite Rating. The Composite Rating compiles scores on key fundamental and technical metrics: earnings and sales growth, profit margins, return on equity, and relative price performance. Investors should focus on stocks with a Composite Rating of 90 or higher.

EOG is also the top-ranked stock in IBD’s Oil & Gas-U.S. Exploration & Production group.

Pioneer rose 2.5% to 204. PXD stock is a buy after climbing past its 196.74 buy point. Its buy zone extends to 106.58.

Viper Energy ran up 3.3% to 26.03. The limited partnership is in buy range after breaking out of a cup base on its weekly chart with a 25.42 buy point.

Matador jumped 2.8% to 41.88. The stock below a 47.33 entry point in a 12-week cup base.

The market’s current status warns investors to be cautious while making purchases. After several days of deterioration, the Nasdaq rebounded from a test of support from its 200-day line on Tuesday. But the market’s status remained “uptrend under pressure. That means buying even leading stocks — even oil stocks — breaking out of valid bases can be riskier than usual.

OPEC+ Members Oil Output Misses Targets

Meanwhile, production disruptions overseas are boosting oil prices, as well as oil stocks.

“Of course, omicron offers some demand uncertainty over the coming months, but the market is tight as OPEC+ slowly turns the taps back on,” wrote Craig Erlam, a senior market analyst at Oanda in a note. In addition, the fact that “OPEC (is) struggling to deliver on targets doesn’t help alleviate any of that tightness in the market. Prices could remain elevated for some time yet.”

OPEC+, made up of Organization of the Petroleum Exporting Countries member countries and top-producing nonmembers like Russia, agreed earlier this month to continue attempting to boost production by 400,000 bpd in February. But so far members are failing to hit production targets.

In December, OPEC only increased production by 90,000 bpd, according to Bloomberg figures. Producers faced issues loading cargo in Nigeria. And Libya continued repair work on a major pipeline.

The recent unrest in Kazakhstan, a partner-country in the extended OPEC+ group, has also rattled oil prices.

But order is beginning to return as a new prime minister was appointed by President Kassym-Jomart Tokayev. Troops from Russia and the Russian-led Collective Security Treaty Organization are expected to leave by the end of the week.

On Sunday, Chevron (CVX) — the last of the oil stocks listed on the Dow industrials, and which has operations at the Tengiz field, said that it was slowly reviving production toward normal levels.

Follow Gillian Rich on Twitter for energy news and more.


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