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Oil and Gas continue to show Strength

| Jun 13, 2009 | Comments 8

Oil and Gas continues to be a bullish sub-sector within todays market. My fundamental outlook for the Oil & Gas sub-industry for the next 12 months is positive. I forsee attractive valuations despite lower oil and gas prices. While most U.S. based Oil Companies expect profit drops of around 65% in 2009, I see it rebounding over 65% in 2010 and higher based upon higher projected pricing due to improved long-term economic outlook and new project start ups that have helped boost the upstream in the gas and oil volume. The problems have past as the main thing effecting the sector was the spread of the credit crisis which made it hard for the oil companies to expand. Now that these problems are aside us and the resurgence in capital markets, it will allow for the Oil and Gas companies to start expanding again. As a result, many people are curious in what are some hot stocks within this industry. Strong oil and gas play are Chevron (CVX) which will continue to grow due to its acquisition in 2005 of Unocal and its advanced development of successful worldwide projects. ConocoPhillips (COP) who is holding a strong array of oil positions boosting its market-share, Exxon Mobile (XOM) who continues to dominate the sector by its shear size, Noble Corporation (NE) who’s revenue stream is safe and strong due to its large amount of contract backlogs, Total SA (TOT) who’s strong portfolio bodes well for the future and Transocean (RIG) who is a solid deep-water oil play.

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Filed Under: Commodities | Emerging Markets | Energy • Featured

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  • Cooper

    Strong play the whole industry up in large. Agree that overall oil is a Bullish sector that should continue to rise.

  • Simon

    Oil is always in growing demand partly why I agree that always companies are strong power plays within the oil industry.

  • http://stocksonwallstreet.net James

    Long-term is a hard projection as who knows what the state of the world will look like if the whole North Korea debacle blows up to create a bigger problem than most people expect. As a result I like to just analyze oil on a yearly basis and I think that a accurate 12 month projection for the price of crude oil would be around $90-$100. Goldman Sachs projected $90 so its a safe bet around there. You never know though OPEC could superficially inflate the price of oil, like they did last year, to stimulate more money.

  • Thomas

    Not so sure oil will rise that high. Depends on what OPEC decides to do, I believe $150 is more realistic.

  • Miguel

    Look for oil to reach $250 a barrel within the next 5 yrs. Just imagine what that will do to the revenue streams of these companies. Up, Up, Up,

  • Jackie

    NE has huge growth potential in the coming year

  • http://stocksonwallstreet.net James

    Add Petrobras, PBR to the list for strong oil plays

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