/  Forex Trading   /  Best Oil Stocks of 2023: Oil Investing 101 The Motley Fool

Best Oil Stocks of 2023: Oil Investing 101 The Motley Fool

best oil stocks to buy 2022

Profits and losses can swing wildly based on small shifts in demand or moves by petrostates such as Saudi Arabia and Russia, whose interests can run counter to the public companies in the industry. Supply and demand imbalances can cause huge fluctuations in oil prices. We saw that in early 2022 after Russia’s invasion of Ukraine, which sent crude prices soaring into the triple digits for the first time in years. Cash on hand equates to $42.07 billion, a reasonably large sum for a stock valued at roughly $203 billion. Following a drastic drop in 2020 due to pandemic-induced declines in demand for oil, Exxon hit a new all-time high in early 2023. Exxon has a relatively low P/E ratio of 7.15 and a long-term track record of several decades of strong returns.

The low debt and high cash reserves mean it has ample capital to invest in expansion projects, including renewable fuels. Phillips 66 is one of the leading oil refining companies, with operations in the U.S. and Europe. It also has investments in midstream operations and in petrochemicals via its CPChem joint venture with Chevron (CVX -2.42%).

It would seem that for the time being, our reliance on fossil fuels is here to stay. And on a global basis with the continued economic expansion of China and India, you might imagine that demand will increase. The first to assess when evaluating a sector for a specific product is understanding the demand.

Law of Supply and Demand

In particular, FANG’s board authorized $2 billion in stock buybacks in 2021. Then, in mid-2022, the company increased that authorization to common stock repurchases of $4 billion. When you’re ready to buy, pull up the security you’ve chosen and tap the “buy” or “trade” button. Then enter the number of shares you want — or, if purchasing fractional shares, the dollar amount you want to spend — and submit the order.

Canadian energy stocks that pay dividends — a portion of corporate profits shared on a specific timeline — are attractive to those who prefer a long-term approach to wealth creation. Dividend investing allows for a steady flow of income and the opportunity to increase equity holdings, and requires stocks with high dividend yields. Although they remain highly cyclical in nature, oil stocks are still an attractive investment opportunity. The fortunes of oil companies depend to a greater or lesser extent on the price of crude oil.

best oil stocks to buy 2022

Here are the top three oil and gas penny stocks with the best value, the fastest growth, and the most momentum. Fueled by Russia’s throttling of the natural gas pipeline into Europe, energy stocks like Occidental Petroleum (OXY) and liquefied natural gas (LNG) producers and shippers like Scorpio Tankers (STNG) made big moves. The Oracle of Omaha has been buying shares of the U.S. oil company hand over fist since last spring.

Imperial Oil Limited (IMO)

Keep reading to find the top five oil stocks to buy now and watch your returns multiply this year. The energy sector has long offered attractive dividend payouts to investors. Here’s a look at the five top Canadian oil and gas dividend stocks. Although the immediate impact of this imbalance is high energy prices and record cash flows for O&G companies, how and where the industry will invest in the future remains uncertain.

Because of that volatility, a list of the best performers won’t tell you which stocks will do well in the future, but many of the top energy stocks remain the “best of breed” for years. And sometimes energy companies attract a big name investor or two, such as legendary Warren Buffett, who has been acquiring shares in Occidental Petroleum in the recent past. Oil stocks contain less risk than trying to buy and sell oil on the options or futures markets. And most oil stocks pay a dividend which gives investors a predictable income stream that can make up for the volatility that is inherent in these stocks.

Mark Little’s departure came after Elliott Management raised concerns about safety and operational problems at Suncor, noting that there have been 12 fatalities at the company’s oil sites since 2014. Buffett no doubt likes that OXY stock nearly doubled in 2022, making it one of the best-performing stocks in the S&P 500. He also certainly likes Occidental Petroleum’s low P/E ratio of 5.3. He’s also written for Esquire magazine’s Dubious Achievements Awards.

On top of its refining business, MPC has taken control of separate distribution channels. Recognized internationally due to its familiar red and yellow logo, Shell also has one of the strongest brands on this list. With the company’s roots dating back as far as the 1830s, Shell is one of the most experienced companies in the oil industry, and it’s reasonable to assume it will retain its leadership position in Europe. This means investors have to expect some difficult year-over-year comparisons of results during each quarterly earnings season in 2023.

Next on this list of top Canadian oil and gas dividend stocks is Peyto Exploration & Development, which conducts unconventional natural gas exploration, development and production in the Deep Basin in Alberta, Canada. However, analysts remain optimistic about the sector, and there are signs that oil and gas companies in Canada may be in a multi-year bull market. The top oil and gas stocks on the TSX and TSXV have been posting gains despite volatile market conditions, and many companies offer strong payouts for dividend investors.

About MarketBeat

The company is an intermediate oil and natural gas firm with operations focused on the Montney/Doig resource play in the Peace River Arch area of Alberta. W&T Offshore started operations in 1983 and is a Houston-based independent oil and natural gas company with operations in the Gulf of Mexico. The company has a diverse portfolio of assets, including production, development, and exploration properties, as well as offshore facilities. Crescent Point Energy was founded in 1994 and is a Canadian crude oil and natural gas exploration and production company. CPG has operations in Saskatchewan, Alberta, British Columbia, Manitoba in Canada, and North Dakota and Montana in the United States. Yes, buying oil stocks may be good today, but what about 20 years from now?

  • WTI reached a YTD high in November 2022 at $8.99 from which it retraced to current levels of $5.85.
  • Unlike many of its peers, however, FANG has managed to generate positive returns in 2023, gaining 5.7% for the year-to-date.
  • IEA member countries are required to ensure oil stock levels equivalent to no less than 90 days of net imports and to be ready to collectively respond to severe supply disruptions affecting the global oil market.
  • CNQ has outperformed the market handily over the last five years, delivering total returns of more than 80%.
  • We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.

This cash flow should continue to protect ExxonMobil’s dividend and its status as a Dividend Aristocrat. Given the growth of renewables, many investors are choosing to avoid oil stocks entirely. However, ExxonMobil is making investments in lower-carbon fuel sources, including carbon capture and storage, as well as biofuels.

Energy Disruptions

Interestingly enough, this means that the rollback in energy prices from prior highs a year or two ago has actually been quite good for VLO recently, thanks to lower input costs and premium pricing on refined goods. A robust economy can support rising oil prices and oil producer profitability. However, geopolitics and capital allocation also play crucial roles in the industry. Thanks to its large-scale, vertically integrated operations, Phillips 66 is among the lowest-cost refiners in the industry.

Forms EIA uses to collect energy data including descriptions, links to survey instructions, and additional information. Tools to customize searches, view specific data sets, study detailed documentation, and access time-series data. State energy information, including overviews, rankings, data, and analyses. Monthly and yearly energy forecasts, analysis of energy topics, financial analysis, congressional reports. This website is using a security service to protect itself from online attacks. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data.

Borr Drilling stock opened the day at $8.01 after a previous close of $7.99. Borr Drilling is listed on the NYSE, has a trailing 12-month revenue of around USD$533.8 million and employs 1,504 staff. Transocean stock opened the day at $8.07 after a previous close of $8.02. Transocean is listed on the NYSE, has a trailing 12-month revenue of around USD$2.6 billion and employs 5,040 staff.

Open Data

You can read all about precious metals investing in our comprehensive guide here. The company has a diverse portfolio of high-quality assets, including a significant position in the Bakken and Three Forks formations in the Williston Basin. Crescent Point is committed to maximizing value for shareholders through a disciplined approach to capital allocation and a focus on operational excellence.

best oil stocks to buy 2022

The drawdown of available shares has helped improve operating metrics for Diamondback that are measured on a per-share basis. The move also is part of a long-term effort to support prices thanks to reduced supply of tradable shares. This structural focus is a sign that FANG is an oil stock that is looking beyond short-term pricing trends in oil. The result is a lot of volatility in distributions in the short-term, based on the amount DVN drills and the price it commands in the current marketplace.

If a brand is a referral partner, we’re paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Get this delivered to your inbox, and more info about our products and services. While on the supply side as in most self-regulated markets, supply usually marginally exceeds supply. It’s true that OPEC+ meet regularly to determine their unified output, but in the end, they are motivated to maximize their profits and maintain supply at steady rates.