Many investors have been on the lookout for the best oil stocks to buy, as the demand outlook for this sector improves. Indeed, bullishness on the outlook for energy has been on the rise since the start of the year. Pioneer Natural Resources’ (NYSE:PXD) CEO, Scott Sheffield, forecasts oil prices to range from $80 to $100 moving forward, due to energy demand surpassing supply. Many also consider recent Saudi and OPEC+ output cuts as reasons to get bullish on this sector, if demand materializes as expected.
Notably, crude oil has performed well of late. This commodity has rebounded significantly from its July low, currently hovering around its four-month high and poised for a potential breakout. The output cut from Saudi and Russia (1 million barrels/day until September) boost the bullish narrative on oil, at least over the medium term. I think the structural fundamentals are pointing in the favor of investors right now, making it a great time to buy these oil stocks that are poised to gush higher.
Chord Energy Group (CHRD)
Chord Energy (NASDAQ:CHRD) is a natural gas and crude oil exploration company focused on the Williston Basin, in North Dakota. Chord has a net average daily capacity of production of 119,785 net Boepd (barrels of oil equivalent per day) of oil.
The company’s unique positioning in the Williston Basin, and its strong operating focus, has led to stellar operating results in Q2 2023. Chord reported impressive revenue of $912.1 million, representing growth of 15.5% year-over-year. Impressively, the company’s GAAP earnings per share also came in at $4.96, blowing analyst expectations away. These bottom line numbers were nearly 30% higher than where analysts believed Chord would come in at.
Like the other names on this list, Chord outperformed due to strong oil prices and modest spending. As Chord continues to ramp up production and commodity prices remain strong, CHRD stock is one to consider buying right now.
Plains GP Holdings LP (PAGP)
Plains GP Holdings LP (NASDAQ:PAGP) owns and operates midstream energy infrastructure in the U.S. and Canada through its subsidiary, Plains All American Pipeline, L.P. Mistream energy infrastructure is a fancy way of saying Plains is a pipeline operator, providing much of the back-end services to the oil and gas sector needed to turn crude oil into things that are useful.
In particular, Plains provides facilities, transportation, and logistics services for oil operators in both the natural gas liquids and crude oil space. Many oil producers looking to transport their oil to storage or fractioning facilities, or send their commodities to terminals, will use Plains to get their product where it needs to go.
Strong energy prices generally support the health of the overall energy sector, which is bullish for Plains. Like the other companies on this list, Plains posted strong results in its second quarter. Earnings cam in at 25 cents, beating analyst estimates by a wide margin. As growth in the oil sector continues, this is a great midstream play for long-term investors to consider.
SM Energy (SM)
SM Energy (NYSE:SM) is a Texas-based energy company involved in the acquisition, development, and production of oil, gas, and natural gas liquids. SM’s assets are located in West Texas (80,000 net acres) and South Texas (155,000 net acres). The company has an average daily net production of 145.1 million Boe/d (barrels of oil equivalent per day), comprising 45% oil, 40% natural gas, and 15% NGLs.
While reported Revenue did not meet analyst expectations this past quarter, SM’s earnings per share and cash flow per share still beat consensus. The company’s bottom line earnings came in at $1.28 per share, a notable surprise of more than 15%. With the recent strong performance of oil markets supporting its narrative, SM stock is certainly one of today’s must-buy oil stocks.
