When the U.S. controlled oil prices by adjusting its strategic petroleum (“SPR”) reserves, it might have angered Saudi Arabia. Last week, OPEC+ announced a surprise oil cut. Energy investors should consider $100 per barrel of oil a possibility this year.
Strongly run firms like Exxon (XOM) and ConocoPhillips (COP) are two energy stocks to consider. The OPEC+ supply cut might send these inexpensive stocks to all-time highs. XOM stock traded at a P/E of below 9 times. COP stock traded below a 7.5 times P/E recently.
In Canada, Suncor Energy (SU) is increasingly attractive at a 6.6x P/E. It simplified its business by selling its U.K. oil assets to Equinor worth CAD 1.2 billion.
In Q4/2022, Suncor posted an EPS of $1.81. In 2023, it will increase its stock buyback allocation to 75% by the end of Q1/2023. Most importantly, it will reduce its net debt this year.
Cenovus Energy (CVE) is another energy stock to consider. QatarEnergy acquired a 28% interest in Exxon’s EL 1167. Cenovus has 22% ownership.
Investors may hold the Energy Select ETF (XLE) or the Oil Services ETF (OIH). This will expose the portfolio to the sector instead of specific companies
