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Highlights
- Crude oil prices have increased over 60% to trade above USD 80 per barrel in 2021 due to higher demand and restricted supply by the OPEC+ group.
- The surge in oil prices has boosted the revenues of companies engaged in the exploration and refining of crude oil.
The crude oil sector is buzzing with oil prices trading under pressure in the international market amid reports of increases in oil supplies from the US and a lower demand prediction.
Crude oil prices have declined in recent weeks due to the rise in the US dollar and speculation that the US government might release oil from its strategic petroleum reserves to lower the crude oil prices and cool down surging inflation. In addition, the US-based energy firms added more rigs for the third consecutive week, which indicates higher future oil output.
Last week, the Organization of the Petroleum Exporting Countries (OPEC) released its oil demand forecast for the fourth quarter of 2021, indicating lower demand for the oil by 330,000 barrels per day compared to the previous month’s forecast because of slow economic recovery due to higher crude oil prices.
The crude oil price has increased over 60% to trade above USD 80 per barrel in 2021 due to higher demand and restricted supply by the OPEC+ group. The higher prices have contributed to a rise in inflation amongst oil-importing countries. At the same time, the surge in oil prices has boosted the revenues of the companies operating in the exploration and refining of crude oil.
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Let us explore 3 FTSE listed oil and gas stocks that can be considered for investment:
Cairn Energy Plc (LON: CNE)
FTSE250 listed company explores, discovers, and produces oil and gas at different locations across the world. It holds a portfolio of oil production assets in the UK and other countries. The company reported a net cash inflow of USD 106 million from oil and gas production, while its total oil production was at 19,268 boepd for the six months ended 30 June 2021. In the upcoming quarter, the company will complete the acquisition of Shell's Western Desert assets in Egypt, which will help the company to further expand its operations. Also, the company will complete its proposed disinvestment of the UK North Sea in the fourth quarter of 2021.
Cairn Energy Plc currently trades at GBX 186.20, up by 1.69% on 15 November 2021 at 10:35 am GMT+1 with a market cap of £914.16 million. In the last one year, the stock has given a 12.16% return to its shareholders.
Enwell Energy Plc (LON:ENW)
The company does oil exploration and production in Ukraine, Egypt, and Romania. It has a production license in the Poltava region. The company reported no significant disruption due to the Covid-19 pandemic in the first six months of 2021. As a result, its production rose by 8% at 4,917 boepd during the period. It reported a revenue rise of 66% at USD 41.1 million due to a higher production rate and improved oil and gas prices in international markets. The company is expected to carry out development work at different sites in upcoming quarters, financed through operational cash flow.
Enwell Energy Plc currently trades at GBX 36.42, down by 0.07% on 15 November 2021 at 10:35 am GMT+1 with a market cap of £116.87 million. In the last one year, the stock has given 65.56% return to its shareholders.
Tullow Oil Plc (LON: TLW)
The company has oil and gas assets in Africa and South America. It has 50 production licences in 11 countries consisting of over 640 million barrels of the reserve. The company reported a minor drop in revenue at USD 727 million (H1 FY20: USD 731 million). However, its gross profit reported significant growth at USD 321 million (H1 FY20: USD 164 million) during the six months ended 30 June 2021. The company has also reduced its net debt to USD 2,290 million during the period.
Tullow Oil Plc currently trades at GBX 46.78, up by 0.37% on 15 November 2021 at 10:35 am GMT+1 with a market cap of £667.1 million. In the last one year, the stock has given a 106.66% return to its shareholders.
