5 Best Oil Stocks To Buy Right Now

After getting thrashed for more than two years, the oil industry has slowly started to recover, amid OPEC’s decision to slash oil production by 1.2 million barrels a day by January 2017. Recent reports suggest that that Saudi Arabia, the second biggest oil producer after Russia, cut its production by 486,000 barrels a day in January. This means that the de-facto head of OPEC is complying with the agreement to cut production. Latest data from the U.S. Energy Information Administration shows that oil stockpiles declined by 7.1 million barrels for the week ended Dec. 30. This signals an upcoming appetite in the global energy markets, which will result in a throttle in the industry.

According to 29 experts and analyst of the oil industry interviewed by Reuters, the expected average oil price in 2017 will be around $57. Oil is currently in early stages of its recovery, and analysts think now is the right time to invest in oil stocks. In this article we will talk about the 5 best oil stocks which can give big gains in the coming months. They include ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), Halliburton Company (NYSE:HAL), Whiting Petroleum Corp (NYSE:WLL) and Transocean LTD (NYSE:RIG).

Exxon Mobil Corporation (NYSE:XOM) has been one of the safest investments in oil and gas sector, even in the worst times after oil recession, because the company averted risks and losses by assessing its projects at much lower prices that its competitors. For example, in 2014, Exxon Mobil’s oil budget for its projects was calculated at a price of $55 per barrel, while companies like Chevron, Shell, and BP were building their capital budgets with oil around $70 a barrel. This helped Exxon Mobil Corporation (NYSE:XOM) down the road. Over the last 12 months, Exxon’s stock has gained over 13%. The company is set to take its production to 450,000 barrel of oil equivalent (BOE). If oil reaches $60 a barrel in 2017, Exxon’s revenue growth from its new production of 450,000 boepd will be about $9.9 billion on an annual basis. A total of 59 hedge funds tracked by Insider Monkey were bullish on Exxon Mobil Corporation (NYSE:XOM) at the end of the third quarter of 2016.

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Back in November, Chevron Corporation (NYSE:CVX)’s stock reached new highs after the company received bullish ratings from notable investment firms like Morgan Stanley, Goldman Sachs and Jefferies. Chevron’s stock has gained over 30% over the past year. The company’s massive spending on Gorgon and Wheatstone LNG projects, which it started to come to terms with the changing oil dynamics, will dwindle in 2017 and 2018, and the company will start getting major chunks of profits from these mega-projects. Chevron has a dividend yield of 3.67%. Phill Gross and Robert Atchinson’s Adage Capital Management owns 3.81 million shares of Chevron Corporation (NYSE:CVX), as of the end of the third quarter.

On the next page, we will discuss some other oil stocks which are suitable for investments.

Halliburton Company (NYSE:HAL) is one of JPMorgan‘s top oil picks for 2017. Halliburton is the second-largest oil services company, whose stock has gained more than 65% over the past 12 months, mainly due to the growth of its business amid an increasing appetite for refracturing technologies around the world.   Investment firm Bernstein recently initiated covering Halliburton (NYSE: HAL) with an ‘Outperform’ rating and a price target of $64. JPMorgan has a price target of $63 on Halliburton’s stock. 56 hedge funds out of 742 funds tracked by Insider Monkey were long Halliburton Company (NYSE:HAL), as of the end of the third quarter.

Even though Whiting Petroleum Corp (NYSE:WLL) registered massive losses in 2016 due to high production costs, the company is set to strengthen in 2017 as it got rid of its high-cost assets last year. Whiting’s lease operating expenses on each barrel of oil equivalent dropped to $7.98 after it sold North Ward Estes. The Colorado-based company is also increasing its production at its most important field asset, Williston Basin. The company is using special techniques to frac sand to complete wells in horizontal direction, which has resulted in enhanced production and reduced drilling times. Whiting Petroleum Corp. (NYSE:WLL)’s price target was increased to $15 from $12 by investment banking firm KeyCorp on Tuesday. Carl Goldsmith and Scott Klein’s Beach Point Capital Management owns 2.74 million Whiting Petroleum Corp (NYSE:WLL) shares, as of the end of the September quarter.

Transocean LTD (NYSE:RIG)’s shares have skyrocketed by over 54% in the past three months. The Switzerland-based company, which owns the largest fleet of offshore drilling rigs, has low debts and an excellent cash liquidity. Its debt-to-equity ratio stands at 55%, versus the industry’s average of 62%. Transocean has a strong global footprint, and extensive experience of working in all major deepwater markets. As of the end of the third quarter, 35 funds in our system were bullish on Transocean LTD (NYSE:RIG), up from 32 funds a quarter earlier. Robert Pitts’ Steadfast Capital Management owns 14.64 million shares of Transocean.

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