Global Oil Closes on $90 Per Barrel (AGYP, CVX, XOM, PXD, MRO And DVN)

Crude oil prices are moving closer to $90 per barrel and the White House appears unable to stop skyrocketing prices. Projections are for oil to reach $150 per barrel by next summer.

Energy sector stocks were mixed. Oil investors appeared confused by the increase and the inability of major producers in the Middle East to boost production.

In all of this volatility, independents like Allied Energy Corporation (OTCMKTS: AGYP) are an attractive and unique alternative domestic oil investment.

Experts see a strong upside for oil production: “Just how strong the upside potential for oil prices is right now is evident in the fact that although Libyan production is on the rebound, prices are not declining,” says an exasperated oil minister of that country.

Oman’s oil minister says the US has told OPEC+ it does not want Brent Crude to reach $100. It is getting close to that price, now.  

Independents like AGYP are growing more valuable as a catalyst for investors in several ways:

  1. Its assets-under-management (AUM) energy reserves are growing more valuable with each uptick in crude prices.
  2. The oil it is pumping from five wells in Texas also rise in value with the price of global oil increasing.
  3. By being a domestic energy producer it is in a rare and coveted position. No dangerous or unreliable supply chain issues impeding delivery to these hungry markets.
  4. It specializes in making older, proven and once-commercial wells new again with the latest technology.
  5. Allied is exploring for more oil and gas on its Prometheus lease site. It has identified plenty of more proven well sites on Texas lease sites

AGYP closed 2021 in the green, however, left a lot of headroom on the chart after reaching its 80 cent peak in July.  After a few quiet months, the company has several open-ended operations that could produce catalytic news in the near term.  With investors seeking opportunities in oil as prices continue to rise, it looks poised to reach those July 2021 highs again.

The domestic energy opportunity is vast and has been confirmed by several agencies. 

The oil and gas rig count jumped 63% last week to 588 — its highest since April 2020, according to a new analysis by Baker Hughes Co.  

Cowen & Co said that independent exploration and production (E&P) companies it tracks plan to boost spending by 13% YOY in 2022. Majors such as BP, Chevron, Exxon Mobil Corp. and Occidental Petroleum are planning to increase investment spending 15-17% in 2022, analysts say.

The International Energy Agency (IEA) is wrong. It thought the Omicron variant would cut oil demand. “Demand dynamics are stronger than many of the market observers had thought,” Bloomberg reports.

Predictions by oil specialists at Morgan Stanley and JP Morgan that oil would reach prices of $100 per barrel later this year seem tame now. BOA seems practically clairvoyant with its projection of $150 per barrel oil by summer.

Other companies affected by this price appreciation include:

  • Devon Energy Corporation (NYSE: DVN) stock is still seen by analysts as undervalued because it returned 160% over the past year. Analyst Steve Gray Booyens notes the Company’s 840% YOY jump in operating income. It also has a high price-book ratio. As in any energy company, it stands to benefit from the jump in crude oil prices. The stock reached its 52 week high on January 12. RealMoney has set an ultimate price target of $111.
  • Marathon Oil Corporation (NYSE: MRO) has attracted more securities analyst investors due to its history of out-earning its own projections. Wall Street analysts are waiting for MRO’s next earnings report, due out February 16. The bullish analysis surrounding its near-term earnings potential is due, in part, to the skyrocketing move in the price of global oil. MRO stock jumps 23.5% in the last month.
  • Pioneer Natural Resources (NYSE: PXD), like the aforementioned AGYP is a Texas based independent oil and gas exploration company.  It has increased 21.45% in the past month. It outperformed the oil-energy sector of stocks, which rose by 14.52%. Its 12 month returns are up 50.26%. ClearBridge Investments said the sector remains at less than 3% of the S&P 500 and remains underinvested and attractive.
  • Chevron (NYSE: CVX) has a market cap of $245 billion. It is a long term play because its stock over the past decade has returned nearly 5%. That includes dividends, compared to only 1% for the sector as a whole. It is diversified into petrochemicals as well.
  • Exxon Mobil (NYSE: XOM) has outperformed primarily because of its high dividends, regardless of actual fundamental performance. With green conservationists now on its Board, Multi-national XOM is playing it carefully. As it budgets increases in fossil fuel exploration domestically and in foreign oil locations, XOM talks the green game about meeting self-imposed carbon emission goals.

    XOM stock can be volatile, but investors hold for the dividends. Meanwhile, XOM stock rose 20.79% the past month. When its next earnings report arrives (February 1), the general concensus among analysts is a 73.65% rise in volume to $80.82 billion. 

All told, the industry is in for a bull market, and sometimes the best place to be in these times is with the companies that stand to gain the most.  AGYP is well-positioned as a fast developing producer seeing their first output benefit from a spike in the price of global oil. It is well managed by senior oil and gas executives and sitting on more than $32 million in energy reserves, a survey reports (the survey of course did not take into account the current trajectory of crude prices).

Keep AGYP on your Watch List.  Energy stocks are jumping in value as oil prices boom and energy exploration increases in profitability.

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