The latest projections from the International Energy Agency (IEA) suggest that demand for oil, gas and coal will peak before 2030.
“This is the first time a peak in demand has been visible for each fuel this decade, earlier than many expected,” wrote Fatih Birol, executive director of the IEA, in an editorial published in the Financial Times.
This prediction does not please the Organization of the Petroleum Exporting Countries (OPEC).
“It is an extremely risky and impractical narrative to ignore fossil fuels or to suggest that they are at the beginning of their end,” OPEC said in a statement.
“In decades past, there was often talk of a peak in supply and, in more recent ones, a peak in demand, but evidently neither has materialized. The difference today, and what makes such predictions so dangerous, is which are often accompanied by calls to stop investing in new oil and gas projects.”
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According to OPEC Secretary General Haitham al-Ghais, the IEA’s claims could have significant global repercussions.
“Such narratives do nothing but lead the global energy system to fail spectacularly. It would lead to energy chaos on a potentially unprecedented scale, with disastrous consequences for economies and billions of people around the world,” al-Ghais said.
OPEC has argued that the IEA’s reasoning on fossil fuels is “ideologically motivated” rather than fact-based. He also noted that fossil fuels still make up more than 80% of the global energy mix and that they provide “vital” energy security for the world.
OPEC’s statement came in the wake of recent increases in oil prices. If you share this perspective on the enduring importance of fossil fuels, you may want to pay close attention to oil stocks. Here’s a look at three that Wall Street finds particularly attractive.
Exxon Mobil Corp. (NYSE:XOM)
With a market capitalization of more than $450 billion, Exxon Mobil is one of the largest players in the global oil and gas industry.
Stocks have seen huge rallies in 2021 and 2022. And the latest surge in oil prices appears to be giving the stock further upward momentum: Over the past month, Exxon shares are up 8%.
The business continues to produce profits and cash flow.
According to its latest earnings report, Exxon earned $7.9 billion in profits in the second quarter. It also generated $9.4 billion in cash flow from operations and $5 billion in free cash flow.
The company is also returning money to investors. In the second quarter, Exxon paid $3.7 billion in dividends and spent $4.3 billion on stock repurchases.
At the current share price, the stock’s yield is 3.1%.
Morgan Stanley analyst Devin McDermott has an Overweight rating on Exxon and a price target of $124, implying a potential upside of 6%.
Devon Energy Corp. (NYSE:DVN)
Devon Energy is an independent oil and gas exploration and production company with onshore-focused operations in the United States
In the second quarter, the company’s oil production reached an all-time high of 323,000 barrels per day.
For the quarter, the company’s operating cash flow was $1.4 billion. Free cash flow was $326 million.
“Our disciplined reinvestment rates allowed us to generate free cash flow for the 12th consecutive quarter and we returned $690 million of capital to shareholders through a combination of dividends and share repurchases,” the company said in a statement. Devon CEO Rick Muncrief.
The company’s latest quarterly dividend, payable on September 29, is 49 cents per share. Keep in mind that Devon pays a fixed plus variable dividend, so the amount may change from quarter to quarter.
Stifel analyst Derrick Whitfield has a buy rating on Devon and a price target of $79, about 49% above the stock’s current value.
Occidental Petroleum Corp. (NYSE:OXY)
Occidental Petroleum shares have more than doubled in 2022. The company has benefited from high oil prices. At the same time, it received more attention from investors after Warren Buffett’s Berkshire Hathaway Inc. revealed a sizable stake last year.
Buffett bought more shares of Occidental in 2023, with Berkshire owning 224.1 million shares of the company at the end of June.
In the second quarter, Occidental produced 1.22 million barrels of oil equivalent per day, a figure that surpassed the midpoint of its guidance range.
Buffett isn’t the only one who sees potential in the oil giant. Truist Securities analyst Neal Dingmann has a Buy rating on Occidental and an $80 price target. As shares currently trade at $66.26, the price target implies a potential upside of 21%.
Keep in mind that due to the volatile nature of commodity prices, even the largest oil companies can experience significant fluctuations in their stock prices. If you appreciate the generous shareholder returns offered by the oil sector but aren’t a fan of such volatility, it may be worth exploring reliable income opportunities outside of the stock market, such as investing in rental properties with as little as $100 remaining completely at your fingertips. -worn out.
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This article ‘Disastrous Consequences’ for Billions: OPEC Blasts IEA’s Fossil Fuel Demand Forecast, Warns of ‘Energy Chaos’ on Unprecedented Scale – 3 Top Wall Street Oil Stocks originally appeared on Benzinga.com
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