On November 6, CNBC reported that following Trump’s presidency, the US oil producers are looking forward to fewer regulations on crude production, which could lead to higher oil supply and consequently lower prices. However, Trump’s plans to impose more sanctions on Iranian and Venezuelan oil could lead to a tighter global market, potentially boosting prices.
Trump’s enthusiasm for increased US oil production was evident in a speech he gave from the Republican campaign in Florida, where he joked about keeping his hands on the “oil, the liquid gold.” The US has become the world’s largest oil producer, accounting for 22% of the global total, and Trump’s policies could lead to even more production.
However, the impact of a Trump presidency on oil prices is ambiguous, according to Goldman Sachs commodities analysts. While increased US production could lead to lower prices, the potential for trade wars and sanctions could dampen global economic growth and slow oil demand. As a result, the longer-term outlook for the market is mixed.
Some experts, such as Amrita Sen, Founder and Director of Research at Energy Aspects, believe that Trump’s policies could actually lead to higher oil prices due to the potential loss of Iranian and Venezuelan barrels from the market. Sen notes that Iranian exports could drop by as much as 1 million barrels per day, which could lead to a tighter market and higher prices.
Others, such as Cole Smead, President and CEO of Smead Capital, are more bearish on the outlook for oil prices. Smead believes that lower prices could lead to decreased revenues for American producers, making it difficult for them to make a profit. He notes that the only thing that will cause increased drilling is higher oil prices, which would give producers the margins they need to operate profitably.
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In an interview with CNBC on November 29, Samantha Dart, Co-Head of Global Commodities Research at Goldman, discussed the potential impact of tariffs on oil imports from Canada and the Trump administration’s plans to increase US oil production.
Dart noted that Goldman’s economists are assuming that Canada and Mexico will likely be able to avoid the proposed tariff increase, but it’s uncertain and if it were to happen, it could impact the overall balance of the market. She explained that Midwest US refineries rely heavily on Canadian crude oil and do not have many alternative options, which could lead to higher gasoline prices in the US.
About the Trump administration’s plan to increase US oil production by 3 million barrels per day. Dart said that the US has been increasing its production to record targets every year and that if the US continues to grow at its current rate, it could potentially reach this target.
Finally, Dart touched on the potential impact of a stronger US dollar on oil prices, noting that a stronger dollar would make oil more expensive in non-dollar economies. However, she noted that when compared to current prices with the level of inventories, oil is currently undervalued, and that the firm expects prices to rise to around $78 per barrel for Brent by June next year, regardless of the impact of a stronger dollar.
Overall, the future of the oil market is uncertain, with both bullish and bearish factors at play. While increased US production could lead to lower prices, the potential for sanctions and trade wars could lead to higher prices. With that in context let’s take a look at the 8 best crude oil stocks to buy right now.
Photo by Zbynek Burival on Unsplash
Our Methodology
For this article, we sifted through Energy ETFs and online rankings to form an initial list of 25 Crude Oil stocks. We then used Insider Monkey’s Hedge Fund database to rank 8 stocks according to the largest number of hedge fund holders, which was taken from the database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of their hedge fund sentiment, as of the third quarter.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 Best Crude Oil Stocks To Buy Right Now
8. Cenovus Energy Inc. (NYSE:CVE)
Number of Hedge Fund Holders: 48
Cenovus Energy Inc. (NYSE:CVE) is a leading Canadian energy company involved in the development, production, refining, and marketing of crude oil, natural gas, and refined products. The company operates across five segments: Oil Sands, Conventional, Offshore, Canadian Refining, and US Refining. The company’s key assets include oil sands projects in Alberta, offshore activities in China and the East Coast of Canada, and refining facilities in both Canada and the United States.
On October 31, Cenovus Energy Inc. (NYSE:CVE) announced its financial and operating results for the third quarter. The company generated $2.5 billion in cash from operating activities, $614 million of free funds, and $2 billion of adjusted funds flow in the quarter. The company’s upstream production of over 771,000 barrels of oil equivalent per day (BOE/d) was slightly lower compared with the second quarter, due to the turnaround at the Christina Lake oil sands facility. However, the turnaround impact on production was lower than forecast, as Christina Lake completed its turnaround ahead of schedule. The early completion of maintenance at the Christina Lake oil sands project resulted in production surpassing expectations by 15,000–20,000 barrels/day.
In the downstream, Cenovus Energy Inc. (NYSE:CVE) saw a significant increase in its downstream refining capacity, with total throughput rising by roughly 20,000 barrels per day compared to the previous quarter, reaching nearly 643,000 barrels per day, which was largely attributed to the successful completion of a major maintenance turnaround at the Lima Refinery.
The company’s offshore production remained steady at 66,000 BOE/day, with notable achievements including life-extension work on the SeaRose FPSO and significant progress on the West White Rose project, which is 85% complete and expected to produce the first oil in 2026.
7. Diamondback Energy, Inc. (NASDAQ:FANG)
Number of Hedge Fund Holders: 49
Diamondback Energy, Inc. (NASDAQ:FANG) is an independent oil and gas company based in Texas, specializing in the exploration and production of crude oil from the Permian Basin. The company primarily serves domestic refineries and energy distributors. On September 10, Diamondback Energy, Inc. (NASDAQ:FANG) completed the merger with Endeavor Energy Resources, to become a leading operator in the Permian Basin. The deal, which was initially announced in February, is valued at $26 billion.
The merger has resulted in Diamondback Energy, Inc. (NASDAQ:FANG) existing shareholders owning approximately 60.5% of the combined entity, while Endeavor’s equity holders own the remaining 39.5% interest. Endeavor, a major player in the Midland area of the Permian shale basin, operates across various basins, including the Core 6 counties of the Midland Basin.
The merged company is expected to produce an impressive 816,000 barrels of oil and gas daily, with a pro forma footprint of around 838,000 net acres. To get to this point, Diamondback Energy, Inc. (NASDAQ:FANG) underwent two comprehensive reviews by the Federal Trade Commission (FTC) for the deal. According to Diamondback’s chairman and CEO, Travis Stice, the merger is a “transformative” deal that will allow the company to continue to grow and succeed.
In Q3 2024, Diamondback Energy, Inc. (NASDAQ:FANG) saw a 13% increase in revenue, driven by higher production volumes, which were boosted by the completion of the Endeavor merger, as well as an uptick in sales of purchased oil. The company’s sales of natural gas, oil, and natural gas liquids grew by 3% year-over-year.
6. Valero Energy Corporation (NYSE:VLO)
Number of Hedge Fund Holders: 49
Valero Energy Corporation (NYSE:VLO) is one of the largest independent refiners in the United States, operating 15 refineries across the US, Canada, and the UK, with a combined daily throughput capacity of 3.2 million barrels. Additionally, Valero Energy Corporation (NYSE:VLO) also operates 12 ethanol plants with a combined capacity of 1.6 billion gallons per year and holds a 50% stake in Diamond Green Diesel, which has the capacity to produce 1.2 billion gallons of renewable diesel annually.
Valero Energy Corporation’s (NYSE:VLO) growth prospects are also supported by its capital investment plan, which allocates approximately $2 billion for 2024. About half of this amount is allocated to growth projects, with a focus on low-carbon fuels and refining projects. Valero Energy Corporation’s (NYSE:VLO) management team is committed to executing these projects, which are expected to enhance the company’s earnings capability and expand its long-term competitive advantage.
Valero Energy Corporation’s (NYSE:VLO) renewable diesel segment, which produces low-carbon fuels, is also expected to drive growth in the future. The segment’s sales volumes have increased by 552,000 gallons per day in the third quarter of 2024, compared to the same period last year.
Valero Energy Corporation’s (NYSE:VLO) Diamond Green Diesel project, which was completed on schedule and under budget, is expected to further increase the company’s renewable diesel production capacity. The company’s ethanol segment, which produced 4.6 million gallons per day in the third quarter, is also expected to drive growth, with production volumes increasing by 255,000 gallons per day compared to the same period last year.
5. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 63
Chevron Corporation (NYSE:CVX) is a global energy company involved in exploration, production, and refining. The company produces 3.1 million barrels of oil equivalent per day, making it the second-largest oil company in the United States. Chevron Corporation (NYSE:CVX) operates across Europe, Africa, Asia, Australia, South America, and North America, and has the capacity to refine 1.8 million barrels of oil per day at its refineries in the United States and Asia.
Chevron Corporation (NYSE:CVX) is in the process of acquiring Hess Corporation for $53 billion, which would give it a 30% stake in the Guyana oil fields. This acquisition would provide Chevron Corporation (NYSE:CVX) with a stable income stream and a rare growth opportunity in Latin America, where the company currently has limited operations. The Guyana oil fields are considered highly productive and low-cost, and Chevron Corporation’s (NYSE:CVX) success in acquiring Hess would diversify its reserves and strengthen its balance sheet.
If the deal proceeds as planned, Chevron Corporation (NYSE:CVX) would gain access to billions of dollars in oil reserves. However, the deal is facing significant delays due to an arbitration dispute with Exxon Mobil, which has claimed a right of first refusal.
In Q3, Chevron Corporation (NYSE:CVX) reported record production in the Permian Basin, which contributed to a 7% year-over-year increase in net oil-equivalent production. Chevron Corporation (NYSE:CVX) also commenced production on major Gulf of Mexico projects. During the quarter, the company announced the sale of $6.5 billion in Canadian assets and repurchased $4.7 billion in shares. By the end of 2026, Chevron Corporation (NYSE:CVX) plans to reduce structural expenses by $2–3 billion.
4. Schlumberger Limited (NYSE:SLB)
Number of Hedge Fund Holders: 65
Schlumberger Limited (NYSE:SLB) is the world’s largest oilfield services company, providing technology and expertise to oil and gas operators globally. Schlumberger Limited (NYSE:SLB) is integral to the crude oil industry due to its drilling, exploration, and production solutions to clients, including major oil companies such as ExxonMobil and Chevron.
In Q3, Schlumberger Limited (NYSE:SLB) reported a 10% year-over-year revenue increase, reaching $9.16 billion. This growth was propelled by a 31% year-over-year revenue jump in its Production Systems segment to $3.1 billion and an 11% year-over-year rise in digital and integration revenue, driven by the adoption of AI-powered tools and digital solutions. Regional growth was led by Europe & Africa and the Middle East & Asia, both experiencing 16% year-over-year revenue increases, while North America’s growth remained modest at 3% year-over-year.
Schlumberger Limited (NYSE:SLB) is focusing on enhancing crude oil extraction efficiency and reducing environmental impact. The company continues to grow by expanding its service offerings and leveraging digital technologies for better resource management. Schlumberger Limited (NYSE:SLB) has also expanded its digital portfolio by introducing the Lumi AI platform and forming strategic partnerships with NVIDIA, AWS, and Aramco.
On November 12, Schlumberger Limited (NYSE:SLB) launched a new technology called Stream, which is a high-speed intelligent telemetry system designed to improve drilling performance and confidence in complex wells. This technology combines proprietary artificial intelligence (AI) algorithms with SLB’s TruLink definitive dynamic survey-while-drilling service.
Schlumberger Limited’s (NYSE:SLB) launch of Stream marks a significant milestone in the development of drilling technology. By harnessing the power of AI and advanced telemetry, Stream is poised to revolutionize the way operators drill complex wells, enabling them to make more informed decisions and achieve better outcomes.
3. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 66
ConocoPhillips (NYSE:COP) is a leading independent exploration and production company with significant crude oil operations worldwide. The company specializes in unconventional oil production from shales in the U.S. and traditional reservoirs globally. ConocoPhillips (NYSE:COP) supplies crude oil to refineries, industrial clients, and global markets.
On November 22, ConocoPhillips (NYSE:COP) completed the acquisition of Marathon Oil Corporation (NYSE:MRO), bolstering its long-term growth potential. Over the next 12 months, the company expects to achieve synergies exceeding $1 billion on a run-rate basis.
On October 31, ConocoPhillips (NYSE:COP) reported financial results for Q3. In Q3, ConocoPhillips (NYSE:COP) generated $5.8 billion in cash from operating activities, with $4.7 billion attributed to cash from operations. The company increased its ordinary dividend by 34% to $0.78 per share and expanded its share repurchase authorization to $20 billion.
ConocoPhillips (NYSE:COP) has outlined a 10-year plan focused on constrained investment, steady growth, enhanced returns, and significant cash distributions to shareholders. This strategy sets ConocoPhillips (NYSE:COP) apart from its competitors.
2. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 71
Occidental Petroleum Corporation (NYSE:OXY) is a global energy company with operations in crude oil exploration, production, and marketing. The company has a strong presence in the U.S., the Middle East, and Latin America. Occidental Petroleum Corporation (NYSE:OXY) is a key supplier of crude oil to refineries and industrial sectors.
In Q3, Occidental Petroleum Corporation (NYSE:OXY) reported $964 million in net income and $3.8 billion in operating cash flow, exceeding estimates. The company’s production hit 1,412 Mboed, exceeding expectations by 22 Mboed, with the Permian Basin leading the charge. Additionally, Occidental Petroleum Corporation (NYSE:OXY) reported a substantial reduction in debt, paying off $4 billion and achieving nearly 90% of its short-term $4.5 billion debt reduction target just two months after completing the CrownRock acquisition.
Occidental Petroleum Corporation (NYSE:OXY) plans to maintain a five-rig program within its CrownRock assets through 2025, aiming for mid-single-digit production growth. The company also seeks to preserve flexibility in capital expenditures across its broader U.S. onshore portfolio, adapting to changes in commodity prices. With the addition of CrownRock assets and robust performance from new wells in the Permian Basin, Occidental Petroleum Corporation (NYSE:OXY) expects to achieve a production level of 1,450 thousand barrels of oil equivalent per day (Mboe/d) in the fourth quarter.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Exxon Mobil Corporation (NYSE:XOM) is one of the largest publicly traded international energy and petrochemical companies in the world. The company operates in 60 countries, with a diverse portfolio spanning exploration, production, refining, manufacturing, and activities across its upstream, downstream, and chemical segments. Exxon Mobil Corporation’s (NYSE:XOM) clientele spans industries, governments, and consumers worldwide. The company is investing heavily in advanced technologies to enhance crude oil recovery and improve efficiency.
On November 1, Exxon Mobil Corporation (NYSE:XOM) announced financial results for the three months ended on September 30. The company reported earnings of $8.6 billion, or $1.92 per share assuming dilution. The company generated free cash flow of $11.3 billion. Exxon Mobil Corporation (NYSE:XOM) achieved the highest liquids production in over 40 years with 3.2 million barrels per day and delivered record high-value product sales in Product Solutions, up 10% compared to the prior year-to-date.
In an interview with CNBC, Exxon Mobil Corporation’s (NYSE:XOM) Chairman and CEO Darren Woods, commenting on the company’s financial results, said that the company’s earnings growth was largely driven by internal efforts to streamline and improve operations. Woods stated that the transformation of the organization over the last eight years is beginning to show its benefits.
Woods also mentioned that the company’s earnings per barrel in the upstream business have doubled since 2019 on a flat price basis and that the company has made significant progress in its low-carbon solutions business, including the development of a world-scale carbon capture and storage project. Woods also mentioned that the company’s production levels are not being constrained by external restrictions, but rather by internal discipline to ensure that investments generate returns.
While we acknowledge the potential of Exxon Mobil Corporation (NYSE:XOM) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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