As economies emerge from lockdowns, crude oil prices are recovering from pandemic lows. In the last 6 months, the WTI spot futures reached pre-Covid19 price levels, jumping 41.8% year-to-date to $68.20…
Oil macroeconomics remain favorable going forward. Indeed, expectations for fuel demand are rising ahead of the U.S. summer driving season, a period prone to higher than normal fuel consumption. However, supply remains limited, as OPEC+ producers agreed last week to maintain supply discipline in order to continue to sustain oil prices.
In addition, weekly U.S. crude stocks are short of 7.8m barrels compared to the 5-year average, indicating that more upside is pending on crude oil futures.
Energy Transfer LP (ET):
ET is a midstream company, focusing on the transportation and storage of crude oil, natural gas liquids, and refined products. The company owns and operates natural gas transportation pipelines and three natural gas storage facilities in the state of Texas. Furthermore, ET also has an investment in Sunoco LP, a motor fuel retailer, and USAC, an independent provider of compression services in the United States.
Since the beginning of the year, ET gained 64.4% to $10.27 per share, surpassing the performance of oil markets, even if midstream companies are less beta sensitive than the oil & gas exploration and production sector.
Yet, ET’s net sales surged in 2021, nearly doubling compared to 2020 from $38.9m to $64.2m and posting a two-digit growth of 18.4% compared to 2019.
Most interestingly, the bottom-line grew even faster, up 62.8% compared to pre-Covid19 levels and is expected to reach $5.83m this year versus only $3.58m in 2019.
Devon Energy Corporation (DVN):
DVN is an independent oil & gas exploration and production company operating in four core U.S. oil-producing areas: the Delaware Basin, Eagle Ford, Powder River Basin, and Anadarko Basin. On the back of rising oil markets, DVN should also benefit from positive tailwinds. DVN shares jumped 90.9% year-to-date to $30.80 per share, marking a new 52-week high and confirming its strong bullish stance.
In terms of financials, DVN is expected to…
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