OPEC+ has decided to cut crude production by 1 million barrels per day as investors scramble for oil stocks to buy. The surprise oil production cut occurred on April 2, 2023.
According to the Saudi Press Agency, a Ministry of Energy official stated the Kingdom of Saudi Arabia will implement a voluntary cut of 500 thousand barrels per day from May till the end of 2023.
Here are the reductions per country:
SAUDI ARABIA = 500K BARRELS/DAY FROM MAY
KUWAIT = 128K BARRELS/DAY
UAE = 144K BARRELS/DAY FROM MAY
KAZAKHSTAN = 78K BARRELS/DAY
IRAQ = 211K BARRELS/DAY
ALGERIA = 48K BARRELS/DAY FROM MAY TO END 2023
OMAN = 40K BARRELS/DAY
What are the Risks of Investing in Oil Stocks?
Like any investment, there are risks associated with investing in oil stocks. The price of oil is subject to fluctuations in the global market, which can cause oil stocks to decline in value. Additionally, oil stocks can be affected by political and economic trends, and natural disasters can also negatively impact the industry. Finally, changes in technology and the introduction of renewable energy sources can reduce demand for oil and, consequently, oil stocks. Investors should seek advice from a licensed financial advisor before investing in any oil company.
Best Oil Stocks to Buy
For investors looking to get into the oil and gas industry, there are several stocks worth considering. Below are three of the best oil stocks to buy right now in our opinion. However, you should always seek investment advice from a licensed financial advisor, especially when it comes to complicated oil stocks. We are not licensed financial advisors and the stock picks below should not be considered as investment advice.
Chevron (CVX)
Chevron is one of the largest oil and gas companies in the world and is a reliable and steady source of income for investors. With a dividend yield of around 3.7%, Chevron offers investors the potential for steady returns over the long-term. Additionally, Chevron is well diversified across the oil and gas industry, providing some protection in the event of a downturn in the sector.
ExxonMobil (XOM)
ExxonMobil is another major oil and gas company and is one of the best oil stocks to buy right now. With a dividend yield of around 3.3%, ExxonMobil offers investors the opportunity to earn a higher return on their investment. Additionally, ExxonMobil is a well-diversified company, providing investors with some protection against market volatility.
BP (BP)
BP is one of the largest oil and gas companies in the world and is a reliable and steady source of income for investors. With a dividend yield of around 4.2%, BP offers investors the potential for steady returns over the long-term. Additionally, BP is well-diversified across the oil and gas industry, providing some protection in the event of a downturn in the sector.
Oil ETFs
There are also ETFs that track the price of oil that may be a good way to play the OPEC+ oil production cuts.
FAQ’s
Q1: What are oil stocks?
A1: Oil stocks are financial instruments that represent ownership in an oil and gas company.
Q2: What are the benefits of investing in oil stocks?
A2: Investing in oil stocks offers several advantages, including the potential for steady returns, dividends, and growth.
Q3: What are the risks of investing in oil stocks?
A3: The main risks associated with investing in oil stocks include market volatility, political and economic trends, and changes in technology. Always seek investment advice, especially when it comes to complicated oil stocks, from a licensed financial advisor.
Q4: What is the best oil stock to buy?
A4: This will depend on the individual investor’s risk tolerance and financial goals. Some of the best oil stocks to buy right now include Chevron, ExxonMobil, and BP but we are not financial advisors. Always seek investment advice from a licensed financial advisor.
Q5: Is it safe to invest in oil stocks?
A5: Investing in oil stocks is generally considered to be a safe option, as the industry is relatively stable compared to other industries. However, there are still risks associated with investing in oil stocks and investors should be aware of these risks before investing.
Q6: Do oil stocks usually go up when OPEC cuts production?
Oil stocks can go up when OPEC cuts production as it can lead to an increase in the price of oil. When OPEC reduces the supply of oil, it can create a supply deficit in the global oil market, leading to higher prices. This can benefit oil companies, as they can increase their revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... and profits. However, the impact on individual oil stocks can vary depending on factors such as the company’s financial performance, production levels, and market conditions. It is important to note that other factors, such as geopolitical events, global economic conditions, and demand for oil, can also affect the performance of oil stocks.
