In this article, we will take a look at the 5 oil stocks to watch on Thursday. To take a look at some more stocks on our watchlist and the latest market situation, go to 10 Oil Stocks to Watch on Thursday.
5. ConocoPhillips (NYSE:COP)
ConocoPhillips (NYSE:COP) is a Houston, Texas-based oil and gas E&P corporation. OPEC’s decisions would impact the company as a decline in crude oil prices is expected to make many sites unfeasible for oil production. ConocoPhillips (NYSE:COP) stock is down 0.19% as of 1:50 PM ET. Jeanine Wai at Barclays reiterated an Overweight rating on ConocoPhillips (NYSE:COP) stock with a price target of $132 in a note issued to investors on May 25. The analyst highlighted that the payout yield would be a major determinant in ConocoPhillips’ (NYSE:COP) stock price performance this year. She added that the sustainability of healthy dividend yield would become a topic of focus as we move forward in 2022 and try to move on towards pre-pandemic levels.
ConocoPhillips (NYSE:COP) was discussed in the Q1 2022 investor letter of ClearBridge Investments. Here’s what the investment management firm said:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holdings ConocoPhillips (NYSE:COP) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
Overall, 67 hedge funds held a stake in ConocoPhillips (NYSE:COP) at the end of Q1 2022.
4. Shell plc (NYSE:SHEL)
Shell plc (NYSE:SHEL) is an Anglo-Dutch energy company that has operations across continents and is considered a bargain in the industry by Andrew Barry at Barron’s. The writer highlighted that Shell plc (NYSE:SHEL) owns some of the most attractive assets in the crude oil exploration and production (E&P) industry. Furthermore, the company holds the biggest liquefied natural gas (LNG) and has the largest chain of service networks. At the current price, Shell plc (NYSE:SHEL) stock is trading at a multiple of six times as compared to the expected 2022 EPS of $9. Shell plc (NYSE:SHEL) is down 0.87% as of 2:25 PM ET.
Shell plc (NYSE:SHEL) was mentioned in the Q1 2022 investor letter of Third Point Management. Here’s what the firm said:
“We have continued to add to our position in Shell, as it trades at the same deeply discounted multiple today that it did last year due to a move up in commodity prices. We are engaged in discussions with management, board members, and other shareholders, as well as informal talks with financial advisors. We have discussed various alternatives with the aim of both increasing shareholder value and allowing Shell to effectively manage the energy transition. We have reiterated our view that Shell’s portfolio of disparate businesses ranging from deep water oil to wind farms to gas stations to chemical plants is confusing and unmanageable. Most investors we have discussed this with agree that the company would be more successful over the long term with a different corporate structure. Discussions among the parties have been constructive and will be ongoing since stakeholders clearly see these corporate changes as instrumental, particularly if Shell wishes to become a leader in the energy transition rather than be left behind as a tarnished legacy brand.
Beyond our discussions around corporate structure, there have been two important developments since our last update. First, Shell announced a plan to redomicile its headquarters to the UK and create a single shareholder class. This move allows greater flexibility to modify its portfolio (either through asset sales or spin-offs) and allows for a more efficient return of capital, specifically via share repurchases. Second, fundamental and geopolitical events have highlighted the strategic importance of reliable energy supplies, especially in Europe. Shell’s LNG business, the largest in the world outside of Qatar, will play a critical role in ensuring energy security for Europe. In our view, the value of this business has increased dramatically since our original investment.
While Shell continues to trade at a large discount to its intrinsic value, with proper management we believe the company can simultaneously deliver shareholder returns, reliable energy and decarbonization of the global economy. We look forward to continued engagement with management and other shareholders and to more strategic clarity from the Company.”
Shell plc (NYSE:SHEL) was held by 37 hedge funds as of Q1 2022.
3. Chevron Corporation (NYSE:CVX)
Chevron Corporation (NYSE:CVX) is a San Ramon, California-based energy company with extensive operations across the world. Chevron Corporation (NYSE:CVX) is down 0.52% as of 2:00 PM ET. The company received a go-ahead to continue its operations in Venezuela from the US Treasury Department, which is one of the OPEC members. The Treasury Department maintained its original mandate and did not agree to the additional conditions of Chevron Corporation (NYSE:CVX). Chevron Corporation (NYSE:CVX) was asking for an additional mandate to gain permission to trade Venezuelan crude oil to recover billions of dollars in debt stuck in the North American state.
In its Q1 2022 investor letter, ClearBridge Investments shared its stance on Chevron Corporation (NYSE:CVX). Here’s what the firm said:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
Chevron Corporation (NYSE:CVX) was held by 53 hedge funds at the end of Q1 2022.
2. PetroChina Company Limited (NYSE:PTR)
PetroChina Company Limited (NYSE:PTR) is the biggest oil and gas producer in Asia. The stock is up 0.49% as of 1:53 PM ET.
In 2021, 4.5% of PetroChina Company Limited’s (NYSE:PTR) total revenue came from Russia. PetroChina Company Limited (NYSE:PTR) agreed to import 800,000 barrels per day (BPD) of oil from Russia, as revealed by filings to the US Securities and Exchange Commission on April 29. This is 40% of the total non-OPEC production that comes into China. The demand for crude oil products would rise in China following the end of COVID-19-related lockdowns across various parts of the country.
Out of the 912 hedge funds in Insider Monkey’s database, 7 funds held a stake in PetroChina Company Limited (NYSE:PTR) as of Q1 2022.
1. BP p.l.c. (NYSE:BP)
BP p.l.c. (NYSE:BP) is a London-based energy company that is expected to be impacted by the OPEC agreement due to its diversity of operations across the globe. BP p.l.c. (NYSE:BP) is up 0.47% as of 2:15 PM ET. The diversification of activities helped BP p.l.c. (NYSE:BP) bear the effect of a 25% windfall tax on the profits generated by oil and gas production. Only 7% of total production and 4.3% of total profits of the company would be impacted by this development. This number falls further for other European oil majors like Shell plc (NYSE:SHEL) and TotalEnergies SE (NYSE:TTE).
BP p.l.c. (NYSE:BP) was held by 27 hedge funds as of Q1 2022.
You can also take a peek at the 10 Software Stocks to Buy Now According to Jim Davidson’s Silver Lake Partners and 10 Undervalued Dividend Stocks to Buy in 2022.
