The World Bank has issued a warning about the potential for escalating tensions in the Middle East to drive oil prices above $100 per barrel, reversing the recent downward trend in global inflation. This news comes as a result of recent missile strikes between Iran and Israel, prompting concerns about the stability of the region.
Even before these recent events, the fall in commodity prices had been leveling off, posing challenges for central banks in making interest rate decisions. The World Bank’s forecast of crude prices averaging $84 a barrel this year may now be too optimistic, as the conflict in the Middle East shows no signs of abating.
As a fifth of liquefied natural gas exports pass through the Strait of Hormuz, the conflict has the potential to drive up prices of natural gas, fertilizers, and food. This situation could have significant implications for the global economy and the energy sector.
In light of these developments, top oil and gas stocks are expected to benefit considerably from the rise in oil prices. Here are some of the top picks for investors to consider for April this year:
1. Diamondback Energy (FANG): Analysts favor Diamondback Energy due to a major acquisition that enhances its operations in the Permian Basin.
2. Shell (SHEL): Upgraded to a “strong buy” by analysts, Shell reported favorable earnings and increased dividends.
3. ConocoPhillips (COP): Recognized for its global oil production capabilities, ConocoPhillips has seen a 10.65% increase in its stock price year to date.
4. Cheniere Energy (LNG): One of the largest LNG exporters in the U.S., Cheniere Energy benefits from extensive pipeline and storage infrastructure.
5. APA Corporation (APA): With a focus on expanding activities in the Permian Basin and Egypt, APA Corporation expects modest oil production growth in 2024.
6. EQT Corporation (EQT): Known for its large-scale natural gas production capabilities, EQT Corporation anticipates total sales volumes to range between 2,200 to 2,300 billion cubic feet equivalent in 2024.
7. Chevron (CVX): Backed by legendary investors, Chevron offers a strong dividend growth rate and share price appreciation potential.
These oil and gas stocks present opportunities for investors looking to capitalize on the current geopolitical situation and potential price increases in the energy sector.
