7 Best Oil Stocks under $20

5. Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR)

Number of Hedge Funds Holders: 31

Share Price: $14.40

Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) engages in the exploration, production, and marketing of oil and gas both domestically and internationally. Based in Brazil, the company operates through three segments: Exploration & Production, Refining, and Gas & Power. It also drills, processes, and transports crude oil from onshore and offshore oil fields.

Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) achieved a net income of $5.4 billion in Q2 2024, reflecting a steady operational performance despite a challenging exchange rate environment. This success was mainly driven by the 81% contribution of pre-salt production in total oil and gas volumes. This highlights the importance of this segment in Petrobras’s operations.

Moreover, the Marechal Duque de Caxias system, with a capacity of producing 180,000 barrels of oil and 12 million cubic meters of gas per day, has positioned the company well for future output increases. Additionally, the anticipated arrival of the FPSO Maria Quiteria is expected to further enhance production capabilities in the Jubarte field.

Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR)’s strong operational efficiency is evidenced by a refining utilization rate of 91%, allowing it to capitalize on market demand for diesel and gasoline. Moreover, the company expects to begin operating its ROTA 3 gas pipeline in Q3 2024, increasing the supply of pre-salt gas to the domestic market. As a result, it will reduce its reliance on imports and bolster energy security.

However, Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) also faced several challenges particularly due to currency depreciation. The 11% depreciation of the Brazilian real against the U.S. dollar resulted in a negative accounting impact of $2.3 billion due to dollar-denominated obligations. Additionally, a $2.1 billion tax settlement contributed to a $300 million loss for the quarter.

Despite these challenges, the company plans to allocate between $13.5 billion and $14.5 billion for investments in 2024. It also plans to expand operations in Brazil’s equatorial region and the Pelotas Basin. Given PBR’s commitment to expand further, its share price increased by nearly 8% in the last three months. Moreover, 31 hedge funds tracked by Insider Monkey have collectively invested $3.7 billion in the company as of Q2 2024, earning PBR a place on our list of the best energy stocks to buy.