We recently published a list of 11 Best Crude Oil Stocks To Buy Right Now. In this article, we are going to take a look at where Hess Corporation (NYSE:HES) stands against other best crude oil stocks to buy right now.
Crude oil markets have seen extreme volatility over the past year, fueled by a variety of economic, geopolitical, and supply and demand factors. Prices fell at the end of 2023, when international demand faltered and supply remained strong from key regions, before rebounding in early 2024 as leading oil-producing countries implemented supply cuts to stabilize the market. Meanwhile, demand signals have been mixed — industrial activity in major economies has improved, but high interest rates and inflationary pressures have limited overall energy consumption. After the presidential elections in the US, the Trump 2.0 agenda appears to be driving cracks in the economic outlook, due to a plethora of initiatives such as tariffs, a fight with immigration, and significant cuts in government spending. Despite Republicans notoriously being pro-business and pro-carbon, as confirmed by an announced policy of encouraging energy exploration and production on Federal land and Outer Continental Shelf, the reaction of the stock market has been mixed, as many crude oil stocks have underperformed the broad market in the last couple of months.
The reluctance of the broad market to price in an acceleration in the crude oil space is likely due to expectations of lower oil prices, primarily driven by an uncertain economic and industrial outlook. A slowing economy generally consumes less oil, which coupled with an increasing supply should put downward pressure on prices. Optimism for the year ahead vanished and the outlook has become one of the gloomiest since the pandemic. Companies started to signal widespread concerns about the impact of government policies, ranging from spending cuts to tariffs and geopolitical developments. For instance, the US economic surprise index hit the lowest last week since September, while the business capex forecasts were abruptly cut at the beginning of the year. Small businesses reflect similar signals, by cutting their capex expectations (as per surveys), while consumers report deteriorating financial expectations going forward. All these developments don’t play out in favor of a strong economy in the following quarters.
Financial markets have reflected this turbulence, as energy stocks moved in tandem with the swings in oil prices, which retracted more than 10% since the inauguration day. While refiners and midstream companies have generally performed well due to resilient transportation and processing demand, exploration and production firms have faced challenges in securing new investments. Looking forward, macroeconomic and geopolitical factors will continue to shape the crude oil market. Geopolitical factors, particularly in key oil-producing regions, remain an ongoing concern – with the end of the Ukraine conflict becoming a reality, Russian oil will likely flow more freely abroad, putting even more downward pressure on global prices. Despite the aforementioned headwinds, there are also some positive takeaways for investors – while renewable energy investments continue to grow, the transition remains gradual, ensuring that crude oil will remain a critical component of the global energy mix in the future, especially under the carbon-friendly Trump 2.0 regime. Furthermore, with oil prices declining and many crude oil stocks being down from their mid-2024 highs, the current developments may turn out to be a great long-term buying opportunity.
Our Methodology
We used the Insider Monkey proprietary hedge fund holding database and identified the 11 most popular crude oil companies, ranked by the number of hedge funds that own the stock.
Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An oil tanker sailing across the horizon, conveying the importance of crude oil transportation for the company.
Hess Corporation (NYSE:HES)
Number of Hedge Fund Holders: 92
Hess Corporation (NYSE:HES) is a global exploration and production company with a strong focus on crude oil and natural gas development. The company operates a high-quality asset base, with key production centers in the Bakken Shale in North Dakota, the deepwater Gulf of Mexico, and offshore Guyana, where it partners with XOM in one of the most significant oil discoveries of the past decade. While crude oil is the core of its portfolio, HES also produces natural gas, particularly from its Southeast Asian assets. With a strategy centered on long-term resource development and operational excellence, HES plays a key role in supplying global energy markets with high-quality crude oil and natural gas.
Hess Corporation (NYSE:HES) delivered outstanding operational and financial performance in 2024, meeting or beating guidance across its portfolio. The company achieved its 2025 Bakken production target of 200,000 barrels per day ahead of schedule in 2024, driven by efficiency improvements and lean manufacturing practices. In Guyana, the company’s three Floating Production Storage and Offloading units (FPSOs) are producing 660,000 barrels per day gross, significantly exceeding their sanctioned capacity due to highly prolific reservoirs with greater oil in place than initially estimated. The company is progressing toward having 6 FPSOs producing 1.3 million barrels per day by 2027, and 8 FPSOs producing 1.7 million barrels per day by 2030.
Looking forward, Hess Corporation (NYSE:HES) expects continued strong performance from its Guyana assets, with future FPSOs likely to exceed nameplate capacity similar to the first three ships. The company has additional growth potential through tiebacks and unexplored deeper horizons in Guyana, along with future gas development opportunities. The pending merger with CVX is expected to close following the arbitration process, which should conclude around late August or September. Management claims that the oil and gas industry faces an investment challenge over the next 5-10 years, with a positive oil price outlook due to continued demand growth and the maturing of shale production.
Overall, HES ranks 2nd on our list of best crude oil stocks to buy right now. While we acknowledge the potential of HES as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HES but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
