Top 5 Oil Stocks for 2017

Many oil stocks were beaten up in 2016 as oil prices continued to be depressed. However, toward the end of the year, some relief came into sight. OPEC made moves to help relieve the oil oversupply that has been keeping prices down. Two OPEC agreements to limit production gave oil a boost over the $50-per-barrel mark.

Companies that have been holding back on productivity can now afford to increase production and expect a reasonable return on investment (ROI). 

These five stocks are poised to turn higher oil prices into profits. Each of these companies has been gathering assets that will produce income in 2017. They have managed to survive through efficiency measures up to now and are ready to expand.

All figures are current as of January 20, 2017.

EOG Resources Inc.

EOG Resources (EOG) is unique in its approach to choosing drilling sites. It looks for premium sites that can produce a minimum 60% after tax real rate of return when oil is at $50 per barrel or better. The company has used the period of depressed oil prices to divest itself of non-premium sites and focus on acquiring premium ones.

It acquired Yates Petroleum in 2016, giving it extensive acreage in the Delaware Basin, where the company can use larger rigs to increase productivity and efficiency.

The stock has seen its share price rise steadily since its breakout in August 2016, and in fact had another breakout in early December. It continues to find support at its 50-day moving average.

Revenues have risen for the four quarters, helping the company cut its income losses. It is poised to have positive income in 2017.

Comstock Resources Inc.

Comstock Resources (CRK), based in Frisco, Texas, may be the quietest success story in the oil patch. It had two breakouts last August and has moved upward since then.

It continues to find support at its 50-day moving average, and up volume has been beating down volume for months. Quarterly reports are showing increased revenues.

Comstock formed a joint development venture with USG Properties Haynesville on January 9, 2017, and now has access to an additional 3,315 acres that will bear 20 wells.

Devon Energy Corp.

Looking at the fundamentals for Devon Energy (DVN), the company reported positive income in the most recent quarter. This turn in the company’s fortunes has helped the stock break sharply upward. After last December’s breakout, the stock has formed a base. This base could serve as the foundation for the next breakout.

With oil prices slated to average $53 per barrel throughout 2017, according to the Energy Information Administration, Devon can continue creating profits. Investors can either buy into the current base or wait for it to breakout.

This Oklahoma company has been in business since 1971, so it is here to stay.

Enterprise Products Partners LP

Enterprise Products Partners (EPD) is not a driller, it is a pipeline and storage company. It is less susceptible to the price of oil, because it has paying contracts with companies for transportation and storage of their oil.

The company also runs export docks and exports liquefied petroleum gas.

The stock pulled out of a long downturn last November and has been rising since. Its 50-day moving average is about to cross above its 200-day moving average. This is called a “golden cross,” and investors consider it bullish.

EPD is no newcomer to the oil field, having been established in 1968.

The last downtrend shook out a lot of sellers, so buyers may dominate this stock throughout 2017.

Atwood Oceanics Inc.

Offshore drillers like Atwood Oceanics (ATW) were hit hard by the downturn in oil prices. The company contracts its services to put up ocean rigs, and many companies didn’t find the expense of ocean drilling attractive with oil at $40 and below.

The recent rise in oil prices has put Atwood in a position to service the needs of oil companies that want offshore rigs. This company drills worldwide.

The stock rose steeply in December of last year and is now in a base that is trending sideways. This formation often results in an upward break in price, so watch for a high-volume day that will send this stock soaring into 2017.

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