5 Energy Stocks For Growth As Oil Crisis Seems To Be Over

Is the oil crisis really over? This billion-dollar question is now in the mind of every skeptical investor. Some say in favor and some believe that oil might fall again in the near term. But if we see the price trend over the last few months we can say that the commodity is definitely walking on the bullish path, bouncing off its multi-years lows.

We believe that the time has come to choose energy stocks that have solid financials along with a chance to grow significantly in the near future banking on the crude rally.

Oil Jumped

The West Texas Intermediate (WTI) crude fell to a 12-year low mark of $26.21 per barrel during mid-February this year. From there, this commodity settled at $50.36 each barrel yesterday, reflecting a whopping jump of as high as over 90%. In fact, this is the first time since Jul 2015 that WTI crude has crossed the $50 benchmark.

Most importantly, crude has been dictating the overall movement of the market. With the massive crude hike, the market also surged. The Dow Jones Industrial Average (DJI) and the Standard & Poor’s 500 (S&P 500) improved significantly from the Feb 11 level – the day when the Dow plummeted to its lowest level since Feb 6, 2014 and the S&P 500 fell to its lowest level since Apr 11, 2014. Since then, the Dow and the S&P 500 have improved 14.6% and 15.5%, respectively.

Why Crude Surged?

The rally in oil prices in the last two trading sessions came mainly due to supply disruptions from Nigeria and Canada.

Militants in the Niger Delta region pledged to curtail crude production in Nigeria. Incidentally, Nigeria is one of Africa’s top oil producing nations with an output of almost two million barrels per day. Moreover, in Canada, the Alberta region has been ravaged by a wildfire for two weeks that has threatened the major oil sands’ production facilities. However, Canadian producers like Suncor Energy Inc. (SU -Analyst Report) are now ramping up their operations.

The other drivers of the crude rally are a weak U.S. dollar and the fact that the upstream players have been relentlessly reducing their spending on drilling operations. In fact, mainly owing to this spending cut the oil output in U.S decreased by 250,000 barrels per day in May from April. Notably, this slippage in one month is the largest in years as per the Energy Information Administration – which provides official energy statistics from the U.S. government.

Who Will Gain?

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