APA Corp. vs. Occidental: Which Energy Stock is a Better Choice?
StockNews
Published Oct 12, 2021 11:40AM ET
Updated Oct 12, 2021 12:30PM ET
APA Corp. vs. Occidental: Which Energy Stock is a Better Choice?
Because OPEC and its allies intend to stick to their earlier agreement to increase oil output only gradually amid heightened demand, oil prices are expected to continue moving higher. Furthermore, producers are restraining new drilling to keep supply tight. Given this backdrop, energy stocks APA Corporation (APA) and Occidental Petroleum (OXY) should benefit. But which of these stocks is a better buy now? Read more to find out.APA Corporation (APA) in Houston Tex., explores for and produces oil and gas properties. It has operations in the United States, Egypt, and the United Kingdom, and has exploration activities offshore Suriname. In comparison, Occidental Petroleum Corporation (NYSE:OXY), which is also based in Houston, acquires, explores for, and develops oil and gas properties in the United States, the Middle East, Africa, and Latin America. The company operates through three segments: Oil and Gas, Chemical and Marketing, and Midstream.
The price of Brent crude has rallied by more than 60% this year, nearing its three-year high, fueled by energy crunch fears. Despite the multi-year high prices, OPEC is firm in its decision to expand its supply gradually rather than raising the output meaningfully to meet the rebounding demand. Moreover, U.S. shale oil production is expected to grow at a “modest rate” over the next 18 months. Record-high gas prices have encouraged a switch to oil for power generation, further spurring the oil price rally. The price momentum should bode well for the oil-producing companies APA and OXY.
APA’s shares have gained 41.5% in price over the past six months, while OXY has gained 35.8%. However, OXY’s 92.9% gains year-to-date compare with APA’s 72.1% returns. In terms of the past year’s performance, OXY is the clear winner with 208.6% price gains versus APA’s 152.5%.
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