We recently published a list of 8 Best Crude Oil Stocks To Buy Right Now. In this article, we are going to take a look at where Schlumberger Limited (NYSE:SLB) stands against the other best crude oil stocks to buy right now.
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.
READ ALSO: 12 Best ADR Stocks To Invest In According to Analysts and Top 8 Stocks To Buy In 8 Different Sectors for the Next 3 Months.
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.
An aerial view of a well site, depicting the scale of oil and gas operations.
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).
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.
Overall, SLB ranks 4th on our list of best crude oil stocks to buy right now. While we acknowledge the potential of SLB to grow, 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 SLB 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.