The crude oil price has advanced above $46 last trading week but continues to seesaw between covid concerns and vaccine hopes. Despite this, analysts stay “bullish” on oil, which is undoubtedly positive for stocks from the oil and gas industry.
Oil price sees a quick recovery
In less than 30 days, the oil price has advanced from $34 above $46, and the current price stands around $45. Oil price remains supported after a string of positive vaccine breakthroughs, and oil companies’ shares are also rising.
OPEC meeting will be one of the main events next week, and OPEC will probably back production cuts for the next three months into 2021. It is still unclear if all countries will have the same quotas for the additional months, but several countries could still prevent an agreement when the group meets next week.
Here we outline three oil and gas industry stocks that are likely to outperform the rest of the market in the short-term
Gazprom holds the world’s largest natural gas reserves, and the company accounts for 12 % of the global gas output. Gazprom continues to be one of the most undervalued stocks in the oil and gas industry, and it is essential to mention that Gazprom’s market cap is only $57B.
In comparison, the company has paid more than $12B dividends to its shareholders in the last three years, and the total stockholders’ equity stands around $232B.
The critical support levels are $4.5 and $4, $5 and $5.5 represent the resistance levels. If the price jumps above $5, it would be a signal to buy Gazprom shares, and the next price target could be around $5.5.
If the price falls in the upcoming weeks, every price in a range from $3.5 – $4 could be an excellent opportunity to invest in Gazprom shares.
Suncor Energy (NYSE: SU) primarily focuses on developing petroleum resource basins in Canada’s Athabasca oil sands, but even with oil at $35, it can still be profitable and pay a dividend. Berkshire Hathaway has Suncor Energy shares in its portfolio, and this stock could be an excellent long-term investment.
Suncor Energy shares have advanced from $11.2 above $18 since the beginning of November, and the current price stands around $17.23. If the price jumps again above $18, it would be a signal to buy Suncor Energy shares, and the next price target could be around $19 or even 20.
It is essential to say that $14 represents a powerful support level. If the price breaks this support, it would be a firm “sell” signal, and we have a free way to $12.
Royal Dutch Shell
Royal Dutch Shell is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and incorporated in England. With the market capitalization of $138B, this stock is still undervalued relative to the market, and maybe now could be a good time to invest in Royal Dutch Shell shares.
In comparison, the company has paid more than $40B dividends to its shareholders in the last three years, and the total stockholders’ equity stands around $160B.
Royal Dutch Shell shares remain supported after Morgan Stanley said that it has confidence in Shell’s cash-generating ability. Royal Dutch Shell stock has advanced from $26 above $37 since the beginning of November as the company reported better than expected Q3 earnings and raised its dividend.
The critical support levels are $32 and $30, while $40 represents the resistance level. If the price jumps above $40 resistance, it would be a signal to buy Royal Dutch Shell shares, but if the price falls below $30, it would be a strong “sell” signal.
Oil price remains supported after a string of positive vaccine breakthroughs, and oil companies’ shares are also rising. Gazprom, Suncor Energy and Royal Dutch Shell are three oil and gas industry stocks that are likely to outperform the rest of the market in the short-term. These three oil and gas industry stocks are still undervalued relative to the market and can be an excellent investment opportunity this December.
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