3 Stocks To Buy As Oil Continues To Rebound: Halliburton, Hess, And Cheniere Energy

NYSE: HAL | Halliburton Company  News, Ratings, and Charts

2020 has been an unprecedented year in the history of the global oil market. The outbreak of the pandemic triggered a major collapse in oil prices, intensified by a short-lived, yet aggressive Saudi Arabia-Russia price war. This was accompanied by an excessive oil supply created by American companies which had triggered a crisis that drove them into bankruptcy.

Some of the companies were propelled to slash capital spending as a way to preserve their balance sheets. A simultaneous negative demand and positive supply shock left the market drowning in supply. WTI futures plunged into the negative territory.

However, after a period of extraordinary turbulence, oil prices stabilized in mid-2020. The prices picked up strongly as optimism grew around a COVID-19 vaccine. Furthermore, on the supply side, the OPEC+ alliance agreed to extend production cuts until the vaccine-led rebound in oil demand fully materializes. In early December, the group agreed to extend 7.2 million barrels per day production cuts through January 2021, which should drive up global prices.

With a gradual normalization of economic activities, oil fundamentals are on the right track for higher oil prices. Companies like Halliburton Company (HAL), Hess Corporation (HES), and Cheniere Energy, Inc. (LNG) are expected to leverage this optimism and gain from a vaccine-led rebound in oil demand.

Halliburton Company (HAL)

HAL provides a range of products and services related to exploration, development, and production of oil and natural gas. It operates through two segments: Completion and Production, and Drilling and Evaluation. Its operations include locating hydrocarbons, managing geological data, drilling and formation evaluation, well construction, and optimizing production.

Earlier this month, HAL teamed up with Accenture (ACN) to transform its digital supply chain and accelerate digitalization within its manufacturing function. This was done to increase process efficiency and increase productivity.

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