The Zacks Analyst Blog Highlights: Jones Energy, Par Pacific, Phillips 66, Ultrapar And Sunoco
Zacks Investment Research | Feb 19, 2019 09:43PM ET
For Immediate Release
Chicago, IL –February 20, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Jones Energy Inc. (OTC:JONE) , Par Pacific Holdings Inc. (NYSE:PARR) , Phillips 66 (NYSE:PSX) Partners LP (NYSE:PSXP) , Ultrapar Participaçoes S.A. (NYSE:UGP) and Sunoco LP (NYSE:SUN) .
Here are highlights from Tuesday’s Analyst Blog:
Crude Oil Prices Near 3-Month High: 5 Top Picks
Crude oil prices have been stabilizing since the beginning of 2019 buoyed by the decision of OPEC and Russia-led oil exporters to cut production levels and supply related problems in Iran and Venezuela.
Additionally, any positive development in the ongoing trade tensions between the United States and China will be a major boost to oil prices. At this stage, it will be prudent to invest in oil stocks with a favorable Zacks Rank.
Oil Prices Near Three-Month High
On Feb 15, the U.S. benchmark West Texas Intermediate (WTI) crude gained $1.18 or 2.2% to close at $55.59 a barrel on the New York Mercantile Exchange. The global benchmark Brent crude rose $1.68 or 2.6% to $66.25 a barrel on ICE (NYSE:ICE) Futures Europe.
Both WTI and Brent saw the highest price finish for a front-month contract since Nov 19, 2018. For the week ended Feb 15, WTI price increased 5.4% and Brent price jumped by 6.7%. Year to date, WTI is up 25.2% while Brent surged 28.3%.
On Feb 14, Energy Intelligence reported that Saudi Aramco stopped oil production for that week at Safaniyah, the world's largest offshore oilfield. An important factor for oil price will be the timing of restricted output from this oilfield. However, on Feb 15, Baker Hughes reported that the number of active U.S. rigs drilling for oil increased by 3 to 857 for that week.
OPEC Production Cut Squeeze Supplies
The OPEC and Russia-led oil exporters have decided to cut crude oil supplies by 1.2 million barrels per day (bpd) in 2019. This massive cut aided in stabilization of oil prices. In December 2018, oil supplies from OPEC nations plunged by 751,000 bpd to nearly 31.6 million bpd.
Further, in January, OPEC’s crude production decreased by nearly 800,000 bpd to an average of 30.81 million bpd. Majority of supply cut resulted from Saudi Arabia’s reduction of crude oil production by 400,000 bpd to an average of 10.24 million bpd in January.
Moreover, data intelligence firm Kepler reported that Saudi Arabia’s seaborne crude exports in the first half of February came in at 6.204 million bpd. This figure reflects a reduction of 1.342 million bpd from January and a decline of 0.91 million bpd year over year.
Additionally, Saudi Arabia’s oil minister Khalid al-Falih recently said that the country may consider trimming oil supplies by an another 500,000 bpd to reduce production level at 9.8 million bpd in March.
Impact of Venezuela & Iran Export Cuts Linger
On Jan 28, U.S. government announced sanctions on Venezuela's state-owned oil company, Petroleos de Venezuela SA (PDVSA). Venezuela, once the fourth largest oil producer in the world, is suffering owing to lack of modernization of oil plants. Notably, Venezuela is a major crude supplier to U.S. refineries.
The sanctions will block diversion of Venezuelan oil assets worth $7 billion by the country’s sitting President Maduro. The United States will continue to support Venezuela’s Interim President Juan Guaidó.
Meanwhile, oil export dropped by 159,000 bpd to just under 2.8 million bpd in Iran owing to the imposition of U.S. sanctions. Notably, Iran is a major supplier of large Asian countries, such as China and India.
Our Top Picks
Crude oil prices are likely to remain northbound in the near term. Consequently, investment in oil stocks will be lucrative. We narrowed down our search to five such stock each carrying a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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