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Barron's: 5 Oil, Gas Stocks Poised to Rise Despite Volatility

Barron's: 5 Oil, Gas Stocks Poised to Rise Despite Volatility

By    |   Tuesday, 23 June 2020 08:52 AM

Investors and lenders are wary of putting money into energy stocks because of their historic underperformance amid the volatile oil-price landscape.

The majority of oil-and-gas companies are likely to lose money in 2020 because of the COVID-19 pandemic, Barron's said

Barron’s launched a quest to find companies whose earnings were rising before the crisis, and whose balance sheets look particularly healthy. Barron’s also eliminated companies with net debt more than four times as high as their adjusted cash flow to ensure we were zeroing in on safer names.

Just a few oil and gas companies have grown earnings while safely covering their debt payments

  • Cabot OIl & Gas (COG) 
  • Canadian Natural Resources (CNQ)   
  • ConocoPhillips (COP)    
  • CVR Energy (CVI)
  • Dover (DOV)       

Meanwhile, Bank of America (BofA) Global Research has lifted its oil price forecast for this year and next as demand recovers from coronavirus-linked shutdowns, the OPEC+ output cut deal curtails supply, and producers slash capital expenditure.

The bank now sees Brent crude oil averaging $43.70 per barrel in 2020, up from a previous estimate of $37. In 2021 and 2022, the bank forecasts average prices of $50 and $55 a barrel respectively, Reuters reported.

For WTI crude, BofA expects an average price of $39.70 per barrel this year, compared with $32 previously, and average prices of $47 in 2021 and $50 in 2022.

"As we head into next year, we believe transportation demand could recover at a faster rate than we initially anticipated," the bank said in a note dated Friday.

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Investors and lenders are wary of putting money into energy stocks because of their historic underperformance amid the volatile oil-price landscape
oil, gas, stocks, shares
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2020-52-23
Tuesday, 23 June 2020 08:52 AM
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