The combination of underinvestment in new oil wells and rising demand underscores what might be a long period of high prices for energy commodities. Meanwhile, many oil and gas stocks are still trading at low valuations to expected earnings despite a sector-wide rally stretching back to the end of 2020.
Underinvestment is good for oil industry and investors Back on March 2, Sam Peters, a portfolio manager at ClearBridge Investments, provided this chart for this article that featured two of his energy stock selections: In the previous article, Peters recommended two stocks: EQT Corp. EQT, which rose 50% from March 1 through May 10, and Pioneer Natural Resources Co. PXD, which rose 4%. Those price increases exclude dividends — Pioneeer’s dividend yield is 6.96%.
Wong estimated that as 2022 began, world demand for crude oil ranged from 100 to 101 million barrels a day, while oil was being produced at a rate of about 98.5 barrels a day.Wong said new oil sources in the U.S. over the past 10 years had been mostly “short-term supply growth” because “you lose 50% to 70% in the first year” of a shale well’s operation.
Favored oil stocks Wong pointed to Canada as a friendlier market for U.S. investors because Canadian wells tend to last 20 to 25 years, by his estimate.
Good article.
US people suffered from skyrocket gasoline price and inflation. These oil companies stock are at the historic highest in last 5 years, and will be punished in the next 8 weeks followed the S&P and Nasdaq crash. Let's see
Oh... XOM at $50 was strong SELL last year now at $90 is a BUY? Hmmm... Analysts have shorter memories than a fly.
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