In this article, we will take a look at the 5 Best American Oil Stocks to Buy Now. For deeper discussion and analysis, please refer to the 12 Best American Oil Stocks to Buy Now.
5. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 64
Phillips 66 (NYSE:PSX) is a diversified and integrated downstream energy provider that manufactures, transports, and markets products.
On June 12, Morgan Stanley analyst Joe Laetsch lifted the firm’s price target on Phillips 66 (NYSE:PSX) from $180 to $196, while keeping an ‘Overweight’ rating on the shares. The target boost implies an upside of over 17% from the current share price.
Morgan Stanley noted that although refining margins have declined from their peak last month, they still remain high compared to pre-war levels. The analyst firm revised its refinery sector price targets and earnings forecasts to reflect the latest strip prices through 2027. The firm added that even if the Strait of Hormuz remains reopened, refining margins are likely to stay supported by tight fuel inventories and stable demand fundamentals.
Phillips 66 (NYSE:PSX) delivered a surprise profit in Q1, driven by a sharp surge in refining margins and higher capacity utilization, which helped the company offset the impact of volatile commodity prices. US refining margins, measured by the 3-2-1 crack spread, rose by approximately 73% YoY on average during the first quarter.
4. SLB N.V. (NYSE:SLB)
Number of Hedge Fund Holders: 74
SLB N.V. (NYSE:SLB) engages in the provision of technology for the energy industry worldwide.
SLB N.V. (NYSE:SLB) announced on June 10 that it had signed a long-term contract with Venezuela’s state oil company, PDVSA, to support the revitalization and modernization of the country’s oil and gas sector. The MoU covers cooperation across exploration, field development, production, digital enablement, and workforce training and development, as Caracas looks to rebuild output from the largest oil reserves in the world.
Venezuela’s oil sector grabbed global attention after the ouster of Nicolás Maduro earlier this year, with President Trump pushing American oil majors to invest and revive the country’s dilapidated energy infrastructure.
A key focus of the partnership is the digital transformation of the South American country’s oil and gas sector, and SLB and PDVSA will use connected data, predictive models, and AI-driven workflows to improve efficiency and fast-track decision-making.
Olivier Le Peuch, CEO of SLB N.V. (NYSE:SLB), stated:
“Venezuela’s oil and gas sector has substantial resource potential, and realizing that potential will require technology, digital integration and long-term talent development. For nearly a century, SLB people in Venezuela have stayed the course — working alongside the country’s energy sector through every cycle, bringing expertise, technology and a deep commitment to local capability. This MoU builds on that continuity and sets out a path with PDVSA to strengthen operational excellence and develop the skills that will sustain performance for years to come.”
3. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 74
ConocoPhillips (NYSE:COP) is one of the world’s largest independent E&P companies based on oil and natural gas production and proved reserves.
It was reported on June 16 that ConocoPhillips (NYSE:COP) has signed a contract with the Syrian Petroleum Company to revive the country’s gas production, making it the first American energy major to sign a deal with the new Syrian government. Along with Novaterra Energy, ConocoPhillips will develop existing gas fields and explore for new reserves in the country.
According to estimates by Wood Mackenzie earlier this year, Syria holds discovered oil and gas resources of at least 1.3 billion barrels of oil equivalent, with large areas of the country still underexplored. Moreover, its offshore sector has never been tapped, with no exploration wells drilled to date.
The 14-year civil war has ravaged Syria’s energy infrastructure and the country’s domestic natural gas production is estimated to have declined to 3 billion cubic metres in 2023 from 8.7 bcm in 2011. The Syrian government expected the deal to boost the country’s gas output by 4 to 5 million cubic metres per day within a year.
Ryan Lance, Chairman and CEO of ConocoPhillips, commented:
“We were in the country a number of decades ago, and this represents the re-entry of our company back into Syria in partnership with NovaTerra. We hope to grow the gas production in the country, and I hope that that expands beyond that to something even more significant for our company and more significant for the country of Syria.”
2. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 94
Exxon Mobil Corporation (NYSE:XOM) is one of the largest integrated fuels, lubricants, and chemical companies in the world.
On June 16, BofA upgraded Exxon Mobil Corporation (NYSE:XOM) from ‘Neutral’ to ‘Buy’ and assigned the stock a price objective of $154, implying an upside of almost 12% from the current levels.
BofA noted that Exxon is currently trading lower than when the US-Iran war began, despite benefiting from the higher energy prices linked to the conflict. The analyst firm noted that even if the peace deal does not hold and oil prices move back up, XOM shares are likely to rise, making it a free call option.
Exxon Mobil Corporation (NYSE:XOM) also remains focused on expansion and is currently exploring potential acquisition targets to bolster its position in the growing LNG and Asian markets. According to recent reports, the oil and gas behemoth has been holding early-stage discussions internally, and Australia’s Woodside Energy has emerged as one of the targets currently being evaluated
Exxon Mobil Corporation (NYSE:XOM) was also recently included in our list of the 14 Best S&P 500 Stocks to Buy Now According to Analysts.
1. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 103
Topping our list of the Best American Oil Stocks is Chevron Corporation (NYSE:CVX). The company manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives.
It was reported on June 16 that Chevron Corporation (NYSE:CVX) has expanded its offshore exploration footprint in the Mediterranean Sea after agreeing to acquire a majority stake in Block 10 from Greek energy company HELLENiQ ENERGY. Under the agreement, the American energy major will take a 70% participating interest in the block, while HELLENiQ will retain the remaining 30%.
The addition of Block 10 marks Chevron’s fifth concurrent offshore venture alongside HELLENiQ ENERGY in the country. The offshore concession is currently in its second exploration phase, where both 2D and 3D seismic studies have already been completed. The companies will now focus on further technical assessments and the identification of potential drilling locations as they evaluate the hydrocarbon potential of the area.
Andrew Deighan, Chevron Director of Exploration for the Middle East and North Africa, stated:
“This is another key milestone for Chevron as we continue to build momentum in the Mediterranean region, an area where we are looking to further expand and strengthen our global exploration portfolio. We are looking forward to evaluating the hydrocarbon potential of Block 10, which is in an exciting frontier area.”
While we acknowledge the potential of CVX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CVX and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 10 Most Profitable Energy Stocks to Buy Now and 10 High Yield Crude Oil Stocks to Buy Now
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
