Top Oil Stocks to Watch: Key Takeaways
- Ways to trade the oil price momentum…
- What the Biden administration means for U.S. oil prospects…
- How you could find awesome opportunities in oil penny stocks…
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What a crazy year and a half (ish) for oil stocks! Remember the oil crash from April 2020? Things have since turned around in the sector. And many oil stocks got a boost from rallying oil prices … Here are five stocks revving my engine right now:
- Enbridge Inc. (NYSE: ENB … read my analysis here)
- Chevron Corporation (NYSE: CVX … read my analysis here)
- TC Energy Corporation (NYSE: TRP … read my analysis here)
- Exxon Mobil Corporation (NYSE: XOM … read my analysis here)
- Whiting Petroleum Corporation (NYSE: WLL … read my analysis here)
Table of Contents
- 1 What Are Oil Stocks?
- 2 Why Trade Oil Stocks?
- 3 Is It a Good Time to Trade Oil Stocks?
- 4 Top 5 Oil Stocks to Watch Now
- 4.1 Oil Stocks to Watch #1: Enbridge Inc. (NYSE: ENB)
- 4.2 Oil Stocks to Watch #2: Chevron Corporation (NYSE: CVX)
- 4.3 Oil Stocks to Watch #3: TC Energy Corporation (NYSE: TRP)
- 4.4 Oil Stocks to Watch #4: Exxon Mobil Corporation (NYSE: XOM)
- 4.5 Oil Stocks to Watch #5: Whiting Petroleum Corporation (NYSE: WLL)
- 5 Top Foreign and Canadian Oil Stocks to Watch
- 6 Undervalued Oil Stocks Under $5
- 7 Oil Stocks Under $1
- 8 The Bottom of the Barrel
- 9 One Platform. One System. Every Tool
What Are Oil Stocks?
Oil stocks refer to companies that extract, transport, or distribute oil products — from offshore or inland drilling to distributing products like plastics and gasoline.
It’s a vast and complex sector that’s heavily influenced by geopolitics. All of that makes this sector volatile. That can make for great trading opportunities. Just look at last year…
That’s when U.S. crude went negative. And there was the oil price war between Saudi Arabia and Russia. It hit many oil stocks hard…
But even though the catalyst was complex, traders could have traded the eventual bounce. Prices often bounce after such fast and strong downward price drops.
But you had to be ready. You had to know the sector, the players, and have a watchlist ready to roll.
Why Trade Oil Stocks?
Oil prices are on a tear this year, and so far, the trend looks strong. The price action alone could benefit certain oil stocks.
Yes, we’re seeing a big transition from gas-powered vehicles to electric vehicles. But we’re a long way off before that’s complete. Gas and oil are still vital to many industries from EV manufacturing to transportation and beyond.
Until planes and plastic run on electricity, oil won’t go away anytime soon. Sound volatile? It can be. And that’s what prepared traders thrive on.
Is It a Good Time to Trade Oil Stocks?
As of this writing, the price of crude oil has risen since the start of the year. If the momentum continues, it has the potential to boost the oil and oil-related stocks even higher.
So you could find stocks to trade in this sector. It all depends on your setups and trading style.
But again, keep the volatility of this sector in mind. Day traders often love volatility … to a point. You have to be careful and plan your trades.
But it’s why I’m watching the sector and keeping an oil stocks watchlist. If I spot one of my go-to setups, great! If not, I’m OK to move on to whatever’s next.
Top 5 Oil Stocks to Watch Now
Let’s get into the watchlist.
Some of them may be priced higher than you’d like — most are near their multi-year highs. But that can make for good swing trades and longer holding periods.
Any big moves in these stocks will likely create sympathy plays in lower-priced stocks. But sympathy plays are usually much more volatile. So study up.
And many of these companies offer a solid dividend … if you’re into that kind of thing. Here are five top oil stocks to watch.
Oil Stocks to Watch #1: Enbridge Inc. (NYSE: ENB)
Enbridge supplies oil and gas throughout North America.
ENB has a fairly high dividend yield of 7%, which makes it appealing for many dividend investors. It’s up over 20% this year. A surge in oil prices could boost this stock to new highs.
Oil Stocks to Watch #2: Chevron Corporation (NYSE: CVX)
Chevron is a multinational oil company that explores, produces, and refines oil.
CVX has a 5.6% dividend yield — which is fairly robust. The stock rallied earlier this year then moved sideways. It’s currently up over 15% year to date.
Oil Stocks to Watch #3: TC Energy Corporation (NYSE: TRP)
TC Energy provides pipelines for oil. In July, the company announced plans to switch to renewable energy to run its pipelines.
TRP is another oil stock with a sizable dividend — 6%. The stock got a boost earlier this year, but it’s currently range bound. It’s still up over 10% in 2021.
Oil Stocks to Watch #4: Exxon Mobil Corporation (NYSE: XOM)
Exxon Mobil is a massive blue-chip stock in the oil and gas sector. Like Chevron, it explores, produces, and refines oil.
XOM has a dividend yield of 6.6%. It’s recently pledged to reach net-zero carbon emissions by 2050. It’s had a very solid 2021 — rallying up over 35% so far.
Oil Stocks to Watch #5: Whiting Petroleum Corporation (NYSE: WLL)
The price of WLL fell under a dollar in 2020. But after the company came out of bankruptcy and reorganized, the stock rallied to double digits overnight.
The move was similar to a reverse split, though. Shareholders were only given one new share for the 75 they owned. Ouch.
WLL tends to be volatile, but it’s interesting to watch. It’s gained over 60% so far in 2021, which puts it as one of the top gainers on this list.
Top Foreign and Canadian Oil Stocks to Watch
The Biden administration isn’t the friendliest to U.S. oil companies. It plans to increase regulations on U.S. oil companies.
The administration also prefers the idea of importing oil, rather than producing it in the U.S. This means foreign oil companies could have an advantage…
Canada produces a significant amount of oil. That means some hot contenders for our list of foreign oil stocks to watch.
Foreign Oil Stock to Watch #1: Suncor Energy Inc. (NYSE: SU)
Suncor is a Canadian oil company that produces and refines oil. It operates mostly in Canada with some exposure in the North Sea.
SU has a 3.8% dividend yield. The price is around the lower end of its historical chart. Even though it’s moved sideways through 2021, it could make for a potential longer-term trade with the right catalyst and strategy.
Foreign Oil Stock to Watch #2: Canadian Natural Resources Limited (NYSE: CNQ)
Canadian Natural Resources is another Canadian oil producer. It’s a larger company than Suncor by market cap. It also has North Sea and offshore Africa exposure.
Increasing oil prices were good to CNQ. The stock beat Q2 earnings expectations in August, and the company now offers a dividend of 4.8%.
CNQ has rallied over 30% so far this year. Like SU, its price is on the higher end of its historical chart. But it could reach new highs if oil prices continue to rally.
Foreign Oil Stock to Watch #3: Petroleo Brasileiro S.A. (NYSE: PBR)
Petroleo Brasileiro is a Brazilian oil company controlled by the government. It focuses on oil exploration and production, with operations in offshore Brazilian oil fields.
PBR is an emerging-markets play. This stock has moved sideways through 2021. But it’s volatile and highly influenced by the Brazilian economy. Any news could move this stock…
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Undervalued Oil Stocks Under $5
Some oil stocks can be high priced. But there are affordable oil companies out there that can make great trade opportunities.
These are often companies that have been beaten down or are up-and-coming. Either way, they could be worth adding to your watchlist for future action.
Undervalued Oil Stock to Watch #1: Helix Energy Solutions Group Inc. (NYSE: HLX)
Helix Energy provides services to offshore oil companies. The company’s Q2 earnings were lower than expected so it’s on a downtrend … but it still makes this list. This beaten-down stock could make a snappy comeback if the tides turn.
Undervalued Oil Stock to Watch #2: Nordic American Tankers Limited (NYSE: NAT)
Nordic American Tankers owns and operates oil tankers. It was the hot stock du jour in 2020 when oil prices went negative. The hype didn’t last, though, and this stock’s down in 2021.
NAT could resurge with the right catalyst so it’s a good stock to monitor. And it has a dividend yield of 12.7%.
Undervalued Oil Stock to Watch #3: Reconnaissance Energy Africa Ltd. (OTCQX: RECAF)
Don’t let the name fool you. RECAF is a controversial Canadian company that operates in Namibia and Botswana.
RECAF had its fair share of bad press but had a legendary rise in 2020. And it went from under $1 to over $10 earlier this year. It’s pulled back significantly from its highs, but it’s the top gainer of this list. Its 2021 returns are over 100%!
This is a volatile stock that offers plenty of trading opportunities.
Oil Stocks Under $1
There are plenty of oil penny stocks that trade under $1. These stocks can offer great opportunities for prepared traders. When big oil stocks become too volatile, oil stocks under $1 often become sympathy plays.
For example, Reconnaissance Energy Africa was under $1 in 2020. It trades far above $1 today. Keep in mind that most oil penny stocks won’t rally this much, though. So do your due diligence.
The Bottom of the Barrel
There are many oil stocks to watch right now. Especially if oil prices continue to rise.
If you’re new to the sector or have a smaller account, it’s smart to start small … even if you can trade bigger. That’s what we teach in the SteadyTrade Team. Join our mentorship group today to take your trading to the next level!
And keep an eye on potential news catalysts. The price of oil is trending up, but new regulations on U.S. oil companies could give foreign oil companies an edge.
Remember to also look for exceptional volume. You need to check multiple indicators to determine whether a stock’s tradeable.
Finally, this list is not a recommendation to trade. It’s just our list of top oil stocks to put on your watchlist.
Which oil penny stocks are on your watchlist? Leave a comment below!
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