5 Best Crude Oil Stocks To Buy As Tensions Rise

In this article, we discuss the 5 best crude oil stocks to buy as tensions rise. To read the detailed analysis of the crude oil market, go directly to the 11 Best Crude Oil Stocks To Buy As Tensions Rise.

5. Chesapeake Energy Corporation (NASDAQ:CHK)

Number of Hedge Fund Holders: 58

Chesapeake Energy Corporation (NASDAQ:CHK) is an Oklahoma-based oil and gas exploration company. A significant portion of the company’s reserves includes crude oil. However, the company is slowly divesting its crude oil assets to focus more on natural gas. On February 21, Chesapeake Energy Corporation (NASDAQ:CHK) announced the sale of a part of its Eagle Ford oil assets for $1.4 billion to INEOS Energy. The company has already sold around $1.425 billion worth of its Eagle Ford oil assets before.

Out of 10 analysts that have covered Chesapeake Energy Corporation (NASDAQ:CHK)’s stock in the last three months, 8 of them keep a Buy or Outperform rating on the company stock and 2 of them maintain a Hold rating. The average price target of Chesapeake Energy Corporation (NASDAQ:CHK) currently stands at $117.20 which represents an over 58% upside to the current price target of $74 at the time of writing.

In the fourth quarter of 2022, Chesapeake Energy Corporation (NASDAQ:CHK) was a part of 58 hedge fund portfolios, down from 70 in the previous quarter.

Carillon Tower Advisers made the following comment about Chesapeake Energy Corporation (NASDAQ:CHK) in its Q3 2022 investor letter:

“Chesapeake Energy Corporation (NASDAQ:CHK), a natural gas exploration and production company, emerged from bankruptcy with little fanfare in 2021, despite having rid itself of its debt burden and onerous pipeline contracts. The company was able to make two large acquisitions at very reasonable prices within its core producing areas, allowing for scale and cost savings. Then in 2022, natural gas prices began to rise well above expectations, increasing the value of Chesapeake’s large natural gas resources and production and contributing to its outperformance.”

4. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Holders: 67

ConocoPhillips (NYSE:COP) is an American oil and gas company with diversified assets in 15 countries. It is one of the largest energy companies and one of the most profitable energy stocks in the world. In the fourth quarter of 2022, 67 hedge funds had a stake in the company with a combined value of $2.98 billion compared to 64 hedge funds, valued at $267 billion in the third quarter.

ConocoPhillips (NYSE:COP) is a dividend stock that has been increasing its dividends for the last two years. At the time of writing, the company has a dividend yield of 1.98% with an annual payout of $2.4. Moreover, the company returned $5.1 billion to shareholders in 2022 in the form of dividends and buybacks, and plans to return $11 billion in 2023. 

On March 10, the Biden Administration approved ConocoPhillips (NYSE:COP)’s $7 billion  Willow oil project located on Alaska’s North slope. The company expects $100 to $400 million of incremental spending on the project.

ConocoPhillips (NYSE:COP) has 6.6 billion barrels of oil equivalent in proven reserves and produced 1.7 million barrels of oil equivalent per day in 2022. In 2023, the company expects to increase production to 1.8 million barrels of oil equivalent per day.

ClearBridge Investments made the following comment about ConocoPhillips (NYSE:COP) in its Q4 2022 investor letter:

“The risk-on environment supported by China reopening drove strong returns for the energy sector, despite underlying commodity prices falling from recent highs. In the portfolio, leading E&P company ConocoPhillips (NYSE:COP) was again among the top contributors; it maintains one of the best balance sheets in the industry and continues to execute well while benefiting from being a low-cost producer and growing liquefied natural gas demand. ConocoPhillips is also investing in field electrification and carbon capture across its portfolio, with ambitions to deliver oil production with industry-low CO2 intensity.”

3. Schlumberger Limited (NYSE:SLB)

Number of Hedge Fund Holders: 67

Schlumberger Limited (NYSE:SLB) is a Texas-based company that provides oilfield services and equipment. It is the largest offshore drilling company in the world by revenue. The company was founded in 1926 and operates globally.

On January 30, HSBC analyst Abhishek Kumar reiterated a Buy rating on Schlumberger Limited (NYSE:SLB)’s stock and raised the price target to $75 from $56.8. The analyst raised his price target due to the company’s strong international growth in the fourth quarter and believes that the service sector is gaining momentum. Schlumberger Limited (NYSE:SLB), being the world’s largest oil and gas services company, is expected to benefit the most from it.

According to the Insider Monkey database, 67 hedge funds held bullish positions on Schlumberger Limited (NYSE:SLB) in the fourth quarter of 2022 with a combined value of $4.66 billion, compared to 63 hedge funds with shares of around $2.44 billion in the previous quarter. The most prominent position in Schlumberger Limited (NYSE:SLB) in the fourth quarter was held by First Eagle Investment Management with 27.5 million shares worth $1.47 billion.

Artisan Partners made the following comment about Schlumberger Limited (NYSE:SLB) in its Q4 2022 investor letter:

“Our top Q4 contributor was Schlumberger Limited (NYSE:SLB), the world’s largest oil services company. Shares of SLB rallied along with the broader energy complex, as structural global supply issues have supported rising commodity prices following years of underinvestment in new production. SLB is performing well in a competitive marketplace. The new management team is conservative, forward thinking and executing a good strategic plan to make the company less dependent upon commodity prices and capex. Management has driven the company’s refocused efforts to increase free cash flow and expand profit margins, a task made easier with the cooperating price of oil. We also like that the business model is becoming nimbler and more adaptive to market forces, as evidenced by its recent focus on contributing to the production of cleaner energy. No single customer is more than 10% of revenue, with global exposure very diversified across basins, customers and capital spending exposure. Additionally, in contrast to much of the energy sector, SLB has consistently generated positive free cash flow. Despite solid price appreciation, the stock remains attractively priced based on our estimates of normalized EPS.”

2. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 71

Occidental Petroleum Corporation (NYSE:OXY) is an American oil and gas company headquartered in Texas. It is another one of the high-growth energy stocks that Warren Buffet loves. 

In the fourth quarter, Berkshire Hathaway owned 194.35 million shares of Occidental Petroleum Corporation (NYSE:OXY) worth $12.24 billion. Moreover, after gaining approval from the Federal Energy Regulatory Commission in August 2022 to buy up to 50% of the company stock, Berkshire Hathaway is loading up on it. During late February and early March, the firm bought 5.8 million additional Occidental Petroleum Corporation (NYSE:OXY)’s shares worth $355 million.

On February 27, Occidental Petroleum Corporation (NYSE:OXY) announced a quarterly dividend increase of 38.5% to $0.18 payable by April 17 to the shareholders of record on March 10. In addition, the company also announced its new $3 billion share repurchase program on the same day.

According to our database, 71 hedge funds had a stake in Occidental Petroleum Corporation (NYSE:OXY) in the fourth quarter of 2022 compared to 74 in the previous quarter.

1. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 79

Exxon Mobil Corporation (NYSE:XOM) is a fully integrated oil and gas Supermajor headquartered in Texas. The company’s main focus is on conventional energy. However, it is also making investments in renewable energy sources. 

Exxon Mobil Corporation (NYSE:XOM) made its way to 79 hedge fund portfolios in the fourth quarter of 2022, compared to 75 in the third quarter. GQG Partners was the most notable shareholder of the company in the fourth quarter with over 32.9 million shares worth $3.63 billion.

On March 10, Mizuho analyst Nitin Kumar reaffirmed a Buy rating on Exxon Mobil Corporation (NYSE:XOM)’s shares with a $147 price target, up from $140. Moreover, the company has been covered by 16 analysts in the last three months, with 10 of them keeping a Positive rating and 5 of them maintaining a Hold rating. The average price target for Exxon Mobil Corporation (NYSE:XOM)’s stock is $127.87.

Here’s what First Eagle Investments said about Exxon Mobil Corporation (NYSE:XOM) in its Q2 2022 investor letter:

“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

Disclosure: None. You can also take a look at the 30 Countries with the Highest GDP in 2022 and Hedge Funds Are Fleeing These 10 Growth Stocks. 5 Stocks They Are Buying Instead.