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3 Energy Stocks to Watch on a Potential Oil Volume Surge in '24

With the first-quarter 2024 results of all major oil energy companies out, investors gained valuable insights into their projections for the upcoming quarters and the entirety of the year. The guidance of energy giants such as EOG Resources, Inc. EOG, ConocoPhillips COP, and Diamondback Energy Inc. FANG indicate that they are intensifying efforts to leverage the strength of crude prices.

High Oil Price to Drive Production

The price of West Texas Intermediate (WTI) crude is trading at close to the $80 per barrel mark. The major events that are keeping the crude price healthy are ongoing geopolitical risks and voluntary production cuts by the OPEC+ members. The U.S. Energy Information Administration (“EIA”) projects WTI spot average crude price at $83.05 per barrel for 2024, which signifies that there are possibilities that the crude pricing scenario may remain extremely healthy.

Higher oil prices may encourage explorers and producers to increase production. Per data from EIA, crude oil production from the United States this year will likely be 13.2 million barrels per day (MMBbl/D), suggesting an increase from 12.9 MMBbl/D in 2023.

3 Oil Firms Aiming for Production Rise

Many of the upstream players are embracing the strategy of production expansion to benefit from the potentially profitable crude prices. The three mentioned energy firms are no exceptions and are worth keeping an eye on. Each currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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In the United States, EOG Resources is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The company posted strong first-quarter 2024 earnings earlier this month.

EOG also provided guidance for 2024 crude oil production, estimating it to fall within the range of 485.5-491.5 thousand barrels per day (MBbl/D). This projected range indicates an increase from 475.8 MBbl/D in 2023, showcasing the upstream player’s intention to capitalize on the favorable pricing environment of the commodity for profitability.

ConocoPhillips also reported first-quarter earnings early this month. Alongside reporting better-than-expected earnings, the world’s leading exploration and production company provided 2024 total production guidance of 1.91-1.95 million barrels of oil equivalent per day (MMBoE/D), suggesting an improvement from 1.90 MMBoE/D last year.

Diamondback Energy,a leading exploration and production company, reported solid first-quarter 2024 earnings on Apr 30.  The company, having a strong focus on the Permian – the most prolific basin in the United States – also provided its 2024 oil production in the band of 270-275 MBbl/D, the midpoint of which suggests a year-over-year improvement of 3%.

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