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The Dirty Dozen Oil Stocks For 2019

Mar. 01, 2019 7:50 AM ETBP, PR, CHK, CLR, COP, CVX, CXO, DVN, OVV, EOG, HES, OXY, PE, PXD, SHEL, XOM, OVV:CA138 Comments


  • The long-term trend is against oil, but we are still in the very early innings of the "end of the oil age."
  • Saudi Arabia has cut oil output and exports leading to dramatic drops in oil inventory.
  • Refining alignments have a significant impact on global oil flows.
  • Some key U.S. shale has tapped the brakes and appears to be moving towards focusing on profitability.
  • Among shale producers, focus on the Permian and companies that can produce out of cash flow.
  • This idea was discussed in more depth with members of my private investing community, Margin of Safety Investing. Start your free trial today »

I called the shale boom and the bust over at MarketWatch. I am also on record for calling the "beginning of the end of the oil age." However, that doesn't mean that there isn't what one subscriber called at least "one more puff on the cigar."

For about the next decade, before the coming age of EVs, oil will still be in very high demand. During this time, the best oil companies will be very profitable as oil supply and demand find balance.

For those who want to own oil stocks, there are certain oil stocks that could give total returns approaching doubles and triples in the next several years. Mind what I said in this article however:

Oil Investing Is Dead, Long Live Oil Trading


Key Points About Oil

There are a lot of myths about oil and a lot of backward-looking investors following regurgitative first level analysts. Here is a look at what is important to know, and believe, now and about the future:

  • Everything oil related should be looked at in the context of the "end of the oil age." Transportation demand will fall 10-20 years from now - markets will adjust years earlier. Petrochemical and plastics demand for petroleum will begin to fall as well in the next 10-20 years as new technologies are already being used to make plastic bottles for companies like Coca-Cola (KO).
  • Saudi Arabia is the kingdom of oil and will remain so. They are the ONLY nation with the capacity and design to manipulate oil prices. Above all else, know that the kingdom will do what is best for them. That means oil prices will be high enough to maximize their profits without instigating long-cycle oil production as competition. Saudi Arabia made their intents very clear a few weeks ago stating "

This article was written by

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Analyst’s Disclosure: I am/we are long CDEV, CHK, CLR, DVN, ECA, PCD, OXY, PE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I own a Registered Investment Advisor, Bluemound Asset Management, LLC, but publish separately from that entity for self-directed investors. Any information, opinions, research or thoughts presented are not specific advice as I do not have full knowledge of your circumstances. All investors ought to take special care to consider risk, as all investments carry the potential for loss. Consulting an investment advisor might be in your best interest before proceeding on any trade or investment.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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