Who are the best stocks in the oil and gas industry to buy in December?

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  • The Gazprom, Suncor Energy and Royal Dutch Shell are likely to outperform the rest of the market
    The price of crude oil rose above 46 dollars in the last trading week
    OPEC will probably postpone production cuts for the next three months until 2021

    Oil prices rose to over $46 in the past trading week, but continue to fluctuate between concerns about covids and hopes for vaccines. Nevertheless, analysts remain “bullish” on oil, which is undoubtedly positive for oil and gas industry stocks.

    Oil price recovers quickly

    In less than 30 days the price of oil has gone from 34 USD to 46 USD, and the current price is around 45 USD. The oil price remains supportive after a series of positive vaccine breakthroughs, and oil company stocks are also rising.

     

     

     

    The OPEC meeting will be one of the main events next week, and OPEC is likely to postpone production cuts for the next three months until 2021. It is still unclear whether all countries will have the same quotas for the additional months, but several countries may still prevent an agreement when the group meets next week.

    Here we outline three oil and gas industry stocks that are likely to outperform the rest of the market in the short term

    Gazprom

    Gazprom has the largest natural gas reserves in the world, and the company has a 12% share of global gas production. Gazprom remains one of the most undervalued stocks in the oil and gas industry, and it is important to note that Gazprom’s market capitalization is only $57 billion.

    In comparison, the company has paid more than $12 billion in dividends to its shareholders over the last three years, and total equity is around $232 billion.

    Data source: tradingview.com

    The critical support levels are $4.5 and $4, $5 and $5.5 represent the resistance levels. If the price jumps above $5, this would be a signal to buy Gazprom shares and the next price target could be around $5.5.

    Should the price fall in the coming weeks, any price in the range of $3.5 to $4 could be an excellent opportunity to invest in Gazprom shares.

    Suncor Energy

    Suncor Energy (NYSE: SU) is primarily focused on developing oil reservoirs in the oil sands of Athabasca, Canada, but even with an oil price of $35, the company can still be profitable and pay a dividend. Berkshire Hathaway has shares of Suncor Energy in its portfolio and these shares could be an excellent long-term investment.

    Data source: tradingview.com

    Suncor Energy’s shares have risen from $11.2 to $18 since the beginning of November, and the current price is approximately $17.23. Should the price jump back above $18, this would be a signal to buy Suncor Energy shares, and the next price target could be $19 or even $20.

    It is important to note that $14 is a strong support. If the price breaks through this support, it would be a clear “sell” signal and we have a clear path to $12.

    Royal Dutch Clam

    Royal Dutch Shell is a British-Dutch multinational oil and gas group headquartered in The Hague, the Netherlands. With a market capitalization of $138B, this stock is still undervalued compared to the market and perhaps now would be a good time to invest in Royal Dutch Shell shares.

    In comparison, the company has paid more than $40 billion in dividends to its shareholders over the last three years, and total equity is approximately $160 billion.

    Data source: tradingview.com

    Royal Dutch Shell’s shares will continue to be supported after Morgan Stanley has stated that it has confidence in Shell’s ability to generate cash. Royal Dutch Shell’s shares have risen from $26 to over $37 since the beginning of November as the company posted better than expected third quarter results and increased its dividend.

    Critical support levels are $32 and $30, while $40 is the resistance level. If the price jumps above the $40 resistance level, this would be a signal to buy Royal Dutch Shell shares, but if the price falls below $30, this would be a strong “sell” signal.

    Summary

    The oil price remains supportive after a series of positive vaccine breakthroughs, and oil company stocks are also rising. Gazprom, Suncor Energy and Royal Dutch Shell are three oil and gas industry stocks that are likely to outperform the rest of the market in the short term. These three oil and gas stocks are still undervalued compared to the market and may be an excellent investment opportunity in December of this year.

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