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Highlights
- Oil prices have rallied past the US$ 120-mark amid the supply woes stemming from the Russia-Ukraine war and the intensified geopolitical pressure on the world economy.
- With various sanctions targeting at isolating the Russian economy, global markets appear to be taking a beating amid the possibility of a Russian energy ban.
- A TSX oil stock listed here rocketed by over 282 per cent in the last one year.
Oil prices have rallied past the US$ 120-mark amid the supply woes stemming from the Russia-Ukraine war and the intensified geopolitical pressure on the world economy.
The West is targeting to isolate the Russian economy through various economic sanctions in response to its attack on Ukraine. With all these developments, global markets appear to be taking a beating amid the possibility of a Russian energy ban.
This ban, if it comes into the picture, could substantially shrink the oil and gas supplies, mainly for European countries, leading energy prices to fly higher and worsen the inflationary environment worldwide.
Keeping in mind the skyrocketing energy prices, let us explore two TSX oil stocks to watch closely.
Vermilion Energy Inc (TSX: VET)
The Calgary-based oil producer recorded C$ 765.91 million in petroleum and natural gas sales in Q4 FY2021, which was nearly double from that of C$ 316.19 million a year ago. Its fourth-quarter net earnings were C$ 344.58 million in 2021, up from a loss of C$ 57.7 million in Q4 2020.
With an increase in earnings, Vermilion Energy is also now set to doll out its first dividend in about two years. The energy enterprise plans to pay a quarterly dividend of C$ 0.06 per share on April 18.
On the stock front, Vermillion shares shot up by almost four per cent to close at C$ 25.03 apiece on Friday March 4. The oil stock has ballooned by roughly 167 per cent on a year-over-year (YoY) basis.
Athabasca Oil Corporation (TSX: ATH)
Athabasca Oil produced 35,147 barrels of oil equivalent per day (boe/d) in the fourth quarter of fiscal 2021, taking its average year-end production to 34,618 boe/d.
Stocks of Athabasca surged by roughly eight per cent to close at C$ 2.14 apiece on Friday and rocketed by over 282 per cent in the last one year.
Bottomline
While rising oil prices can draw one’s attention to energy stocks, investors should note all the factors that can impact the oil and gas industry and influence the profitability of oil corporations before investing in such stocks.
Also read: Is Pembina (TSX: PPL) stock a buy as it merges business with KKR?
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.
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Kajal Jain - Analyst623 PostsKajal is a commerce graduate with expertise in the financial corporate sector. At Kalkine, she writes on Canadian equities and markets. In her free time, she enjoys music and gardening and likes to travel....
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Shreya Biswas - Multimedia Journalist408 PostsShreya Biswas is a multimedia journalist with a degree from the Asian College of Journalism. Previously a literature student-turned-political reporter, she now writes on market trends at Kalkine Media. When not chasing deadlines, she enjoys bloggin...
