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The Zacks Analyst Blog Highlights: Devon Energy, Baker Hughes, Diamondback Energy, Marathon Oil and Chevron

Zacks Equity Research
·6 min read

For Immediate Release

Chicago, IL – November 20, 2020 – 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: Devon Energy Corporation DVN, Baker Hughes Company BKR, Diamondback Energy, Inc. FANG, Marathon Oil Corporation MRO and Chevron Corporation CVX.

Here are highlights from Thursday’s Analyst Blog:

U.S. Crude Hits Highest Price in 2 Months: Here's Why

U.S. oil prices rallied to a more than two-month high, as news about progress in coronavirus vaccine candidates and a hefty decline in distillate supplies outweighed rising crude and gasoline inventories. On the New York Mercantile Exchange, WTI crude futures gained 39 cents or 0.9%, to settle at $41.82 a barrel — the highest since early September.

Below we review the EIA's Weekly Petroleum Status Report for the week ending Nov 13.

Analyzing the Latest EIA Report

Crude Oil: The federal government’s EIA report revealed that crude inventories rose by 769,000 barrels compared to expectations of a 100,000-barrel increase. A rebound in domestic production from the latest hurricane-led shut-ins accounted for the larger-than-expected stockpile build with the world’s biggest oil consumer even as refinery activity trended up. This puts total domestic stocks at 489.5 million barrels — 8.7% over the year-ago figure and 6% higher than the five-year average.

On a further bearish note, the latest report showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) increased 1.2 million barrels to 61.6 million barrels.

Meanwhile, the crude supply cover was down from 36.6 days in the previous week to 36.1 days. In the year-ago period, the supply cover was 28.1 days.

Let’s turn to the products now.

Gasoline: Gasoline supplies increased for the second time in three weeks. The 2.6-million-barrel build is attributable to weaker demand. Analysts had forecast a jump of 300,000 barrels. At 228 million barrels, the current stock of the most widely used petroleum product is around 3.3% higher than the year-earlier level and 4% above the five-year average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) decreased for the ninth week in a row. The 5.2 million-barrel draw reflected an uptick in consumption. Meanwhile, the market looked for a supply decline of 1.8 million barrels. Current inventories — at 144.1 million barrels — are 24.5% higher than the year-ago level and 11% higher than the five-year average.

Refinery Rates: Refinery utilization was up 2.9% from the prior week to 77.4%.

Conclusion

Over the course of this week, oil prices have witnessed impressive gains after biotech company Moderna reported that its coronavirus vaccine was 94.5% effective in trials. The Cambridge, MA-based firm said that analysis indicated a nearly 95% efficacy in preventing infections without any serious safety issue, based on a provisional data analysis. Moderna’s breakthrough announcement comes exactly a week after drugmakers Pfizer and BioNTech announced successful data from their COVID-19 vaccine study.

The breakthroughs, which brighten the chances of emergency approval before the year-end, sent the commodity to a multi-month high. For oil in particular, the twin developments hold out hope toward protection against the deadly pandemic that has crushed the commodity’s demand and caused a bloodbath for the energy-related stocks. A potential treatment is expected to revive economic and transport activity, leading to stronger crude demand.

Oil bulls are also supported by speculation, suggesting that the OPEC+ group of producers will keep holding back supply by 7.7 million barrels per day beyond the December-end timeline, instead of relaxing the cuts to 5.7 million barrels per day from January.

The string of catalysts pushed the Energy Select Sector SPDR — an assortment of the largest U.S. energy companies — up more than 17% over the past month to be at the top of the S&P sector standings.In fact, some of the top gainers of the S&P 500 during this period include energy-related names like Devon EnergyBaker Hughes CompanyDiamondback Energy and Marathon Oil. Meanwhile, the only energy representative in the 30-stock Dow Jones industrial average, Chevron — carrying a Zacks Rank of #4 (Sell) — has also risen handsomely.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

Media Contact

Zacks Investment Research

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support@zacks.com                                      

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Marathon Oil Corporation (MRO) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
Devon Energy Corporation (DVN) : Free Stock Analysis Report
 
Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report
 
Baker Hughes Company (BKR) : Free Stock Analysis Report
 
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