© Reuters. 4 Under the Radar Energy Stocks to Buy After OPEC Fails to Reach an Agreement
OPEC’s failure to reach an agreement on production levels is driving oil prices higher because demand continues to increase amid the reopening of the global economy, while production remains tight. Given this backdrop, we believe lesser-known energy companies ARC (AETUF), California Resources (NYSE:), SilverBow (SBOW), and Goodrich (GDP) should generate substantial returns in the coming months. Let’s discuss.Oil prices are hovering around $75 per barrel with OPEC and its allies failing to reach a deal on their output policy amid a disagreement on the matter between Saudi Arabia and the UAE. While OPEC+ had voted to increase oil production by two million barrels per day beginning in August, the UAE rejected this proposal, leading to an indefinite postponement of talks regarding the cartel’s oil production and output.
Given the rising demand for on the back of the reopening global economy, oil prices have rallied more than 45% in the first half of 2021 and are likely to hit the $80 per barrel mark soon. Declining inventories amid tight production should allow oil prices to rise further. Current inventory levels are expected to decline by another 100 million barrels by the end of this year to well below pre-pandemic levels. According to Wall Street analysts, oil prices might reach triple digits by next summer.
Thus, we think lesser-known oil exploration companies ARC Resources Ltd. (AETUF), California Resources Corporation (CRC), SilverBow Resources, Inc. (NYSE:), and Goodrich Petroleum Corporation (NYSE:) should benefit significantly in the coming months.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.