![]() ![]() The Motley Fool has a disclosure policy.“The Bear” is among relatively few TV shows that truly lean into a Chicago setting: In addition to copious shots of elevated trains and city skylines, there are nods to local culture hallmarks ranging from the obvious (Scottie Pippen, Bill Murray, Vienna Beef hot dogs) to the deeper cuts (Harold Ramis, Pequod’s Pizza, Margie’s Candies). The Motley Fool has no position in any of the stocks mentioned. Matthew DiLallo has no position in any of the stocks mentioned. The Must-Read Trump Quote on Social Securityġ0 Reasons Why I'm Selling All of My Apple Stock The $16,728 Social Security Bonus You Cannot Afford to Miss Oil stocks with those characteristics should be able to easily maneuver through any near-term challenges while potentially generating outsized returns on the next oil price rally.ģ Stocks That Are Absurdly Cheap Right Nowĥ Warren Buffett Principles to Remember in a Volatile Stock Market That means seeking companies that can grow their production at a fast clip on the cash flows produced at $50 to $60 oil while also having cash-rich balance sheets to provide them with some cushion should crude fall further as well as the funds to repurchase their beaten-down stock. If the IEA is correct that oil should find a floor around its current level, then now seems like a good time for investors to consider doing some bargain hunting for beaten-down oil stocks that are set up to prosper at current prices. Looks like a good time to go oil stock shopping It can now retire a larger portion of its outstanding shares since they're cheaper following the recent sell-off. Devon also plans to use about $1.3 billion of those funds to finish its industry-leading $4 billion stock buyback plan. The company can fund that plan with cash flow as well as cash on the balance sheet, which stood at more than $3.1 billion at the end of the third quarter. Devon currently expects to invest $2.4 billion to $2.7 billion on drilling new wells next year, which should grow its oil production 15% to 19% from 2018's rate. However, the oil company is also well suited to handle $50 WTI oil in 2019. That gives it a nice cushion to handle lower oil prices as well as the funds to continue buying back its stock.ĭevon Energy (NYSE: DVN), meanwhile, has tumbled about 35% from October's peak. Meanwhile, thanks to higher oil prices earlier in the year as well as the proceeds from asset sales, Marathon Oil had more than $1.5 billion of cash on its balance sheet. At that oil price point, Marathon can generate the $2.3 billion in cash flow necessary to grow its production by more than 10% while also funding its $170 million dividend outlay. ![]() While the company's cash flow will fall along with oil prices, it's well positioned to handle an environment in which WTI oil is around $50 a barrel. Marathon Oil (NYSE: MRO), for example, has shed 36% of its value during the recent oil market sell-off. That output reduction will last until regional storage levels begin draining, at which time the mandated cut will drop to an average of 95,000 BPD until the end of next year. Alberta, which sits in the heart of Canada's oil sands region, ordered its producers to cut production by 8.7% starting in January, which amounts to 325,000 BPD. In addition to that group's decision, the Canadian province of Alberta issued a mandated production cut due to that region's constrained pipeline capacity. ![]() The IEA noted that OPEC - along with 10 nonmember nations, dubbed OPEC+ - agreed to reduce output by 1.2 million BPD starting in January to address the growing surplus of crude on the market. While that's a slower pace than its view from earlier in the year due to a slowing global economy, it's still healthy growth. It still anticipates that global consumption will expand by 1.3 million barrels per day (BPD) in 2018 and another 1.4 million BPD next year. The IEA's latest outlook for oil demand hasn't changed from the previous month. Barrels of oil rising in height with an upward-pointing red arrow in the background. ![]()
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