OPEC reached an agreement this morning to cut oil production more significantly than anyone expected. In the past, OPEC agreements have suffered from widespread cheating. This time it is somewhat different, in that most of the cuts are coming from Saudi Arabia, and in our opinion, Saudi Arabia tends to cheat a lot less than others and often keeps its commitments. For this reason, it is time for a fresh look at some oil stocks and ETFs.
Below, I will discuss three oil stocks for investors, a super major suitable for most, a rocket ship suitable only for aggressive investors and a high-risk, high-reward special situation. I will also discuss two stocks that are great for short-term trading, and two ETFs in our portfolio.
The super major
In our analysis, the best oil super major to buy is Royal Dutch Shell RDS.B. We have changed our buy zones since my last column. This environmentally friendly oil super major yields 6.85%, but there is no other significant change in our analysis.
The rocket ship
Marathon Oil MRO, is a high-octane investment suitable for aggressive investors only. Our average price is 11.38. As of this writing, the stock is trading at 18.22. Our new buy zone on a pullback is 14.00 to 16.26. If oil goes to $70.00 and stays there, this stock can double.
There is no free lunch, the stock has significant risk because of its poor balance sheet.
Please click here for the annotated chart.
Please click here for the annotated chart.
High risk, high reward
Weatherford WFT, an oil-service company, is a high-risk, high-reward special situation…Read more at MarketWatch
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