3 Soaring Oil Stocks To Ride The Energy Surge

Oil prices are rallying- and energy stocks are looking particularly compelling right now. Brent crude, the international benchmark, peaked at over $75 a barrel for the first time in four years. Multiple catalysts are pushing prices higher from robust demand, supply challenges and increasing geopolitical tensions across the Middle East.

Analysts highlight the chance of renewed U.S. sanctions on Iran as a key factor driving prices. “If Trump abandons the deal [to lift sanctions], he risks a spike in global oil prices… A reintroduction of sanctions without seeing other OPEC-members increase production could remove an estimated 300,000-500,000 bpd of Iranian barrels,” says Ole Hansen, head of commodity strategy at Saxo Bank.

Chevron Corporation (NYSE:CVX)

Shares in California-based oil giant Chevron are spiking right now. In the last month shares are up 11%. Crucially, Chevron stands to benefit the most from greater upside to oil prices. RBC Capital’s Biraj Borkhataria explains: “Higher commodity prices are obviously a catalyst for any commodity producer, but Chevron would likely benefit more than peers given its high operating leverage, especially with its liquids-heavy exposure.” In 2017, for example, Chevron produced 2.728 million net oil-equivalent barrels per day from its operations around the world.

At the same time, Chevron’s 1Q earning results “will have positive impact on its near-term share performance,” with results strong across the board “in stark contrast to an uninspiring print by Exxon,” according to Barclays’ Paul Cheng.

“(Chevron’s) positive first-quarter result was an encouraging sign that Chevron is executing well and we remain constructive on the company’s long-term, shareholder-friendly plan,” the analyst said. Indeed, Chevron is one of the best dividend stocks out there with a highly lucrative 3.6% dividend yield. This translates into a quarterly dividend payment of $1.12.

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