- Crude Oil neared US$ 122 a barrel while Brent was hovering around US$ 123.35 at 2:31 AM EST on Tuesday, June 14.
- Investment in quality TSX oil and gas stocks could provide significant returns in the near term.
- Stocks of Paramount Resources soared by nearly 172 per cent year-over-year.
Oil prices have been rocketing again, with investors worldwide closely monitoring oil demand and supply. It is believed that tightened oil supply stemming from the Russia-Ukraine crisis and China's comeback from COVID curbs is resulting in excess oil demand, which can continue to drive up oil prices.
Crude Oil neared US$ 122 a barrel at 2:31 AM EST on Tuesday, June 14, while Brent was hovering around US$ 123.35. Notably, higher oil prices has helped the S&P/ TSX Capped Energy Index zoom by over 64 per cent in 2022 while the TSX main index lost nearly seven per cent year-to-date (YTD).
Following are five TSX oil and gas stocks that investors can look into.
1. Imperial Oil Limited (TSX: IMO)
Imperial Oil is a fully integrated oil company with upstream, refining and marketing operations. Imperial Oil said ‘strong’ market conditions drove its quarterly net profit to C$ 1.17 billion in Q3 FY2022, which it noted was its highest Q1 net profit in over 30 years.
The large-cap oil producer also said that its Q1 FY2022 cash flow from operations of C$ 1.91 billion market the highest first-quarter cash flow from operations over three decades.
As for its stock performance, IMO climbed over 95 per cent in nine months. Refinitiv findings suggest that IMO stock had a Relative Strength Index (RSI) value of 55.79 on Monday, June 13, depicting a moderate trend in the market.
2. TC Energy Corporation (TSX: TRP)
TC Energy is a C$ 69-billion market cap company with energy infrastructure assets including natural gas pipelines in Canada, the United States and Mexico. The midstream energy company also operates liquids pipelines and power and storage assets.
The energy infrastructure firm significantly increased its profitability by reporting a net income of C$ 358 million in Q1 FY2022 compared to a loss of C$ 1.05 billion in Q1 2021.
TRP scrip grew by almost 21 per cent in six months. TRP's RSI value sharply dropped this month to 39.33 on June 13, as per data taken from Refinitiv. However, its RSI was above the oversold mark of 30.
3. Canadian Natural Resources Limited (TSX: CNQ)
Canadian Natural Resources is one of Canada's biggest oil and natural gas companies, with a total market capitalization of C$ 91.65 billion. Canadian Natural's product portfolio includes heavy oil, light and medium oil, synthetic oil, natural gas liquids (NGLs), bitumen and natural gas.
On the financial front, Canadian Natural paid approximately C$ 0.7 billion as dividends, incurred about C$ 0.8 billion in net capital expenditures, and recorded around C$ 3.4 billion in free cash flow in the first three months of 2022.
CNQ stock galloped by nearly 81 per cent in nine months. CNQ's RSI value was 42.03 on June 13, according to Refinitiv.
4. Paramount Resources Ltd (TSX: POU)
Paramount Resources is a mid-cap oil and gas company with upstream and downstream operations in Canada and the United States. Apart from potential returns, Paramount also delivers dividends every month, making it a suitable investment option for investors seeking short-term gains.
POU stock soared by nearly 172 per cent year-over-year (YoY) and posted an RSI value of 58.03 on June 13, as per Refinitiv.
5. Whitecap Resources Inc (TSX: WCP)
Whitecap Resources is another mid-cap company in the oil and gas properties. The C$ 7 billion market cap company also doles out monthly dividends to its shareholders. This oil company also has a return on equity (ROE) of 74.61 per cent, which is higher than the above four companies, indicating profitability.
WCP stock shot up by over 102 per cent in nine months and recorded an RSI value of 58.03 on June 13, according to Refinitiv data.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.