SHEL, BP., HBR: Should you invest in these stocks with rising oil prices?

May 31, 2022 08:31 PM AEST | By Rishika Raina

SHEL, BP., HBR: Should you invest in these stocks with rising oil prices? — Image source: Matt Oaks,shutterstock .com

Highlights

Amid rising inflationary pressures, the global oil price has surpassed the US$120 (£94.90) barrel mark for the time since late March on Monday.

The easing of the Covid-related curbs by China, leading to expectations of higher demand, has led to a surge in Brent crude.

Another major reason why crude prices have surged is the possible ban on Russian oil imports by European countries.

Amid rising inflationary pressures, the global oil price has surpassed the US$120 (£94.90) barrel mark for the time since late March on Monday, 30 May. With petrol and diesel prices touching record high levels in the UK, the cost-of-living crisis in the country has been escalating further. Both households and businesses are getting severely impacted due to rising commodity prices, and the inflationary situation doesn’t seem to be stabilising anytime soon.

The easing of the Covid-related curbs by China has led to a surge in Brent crude, the international benchmark. This is because of the expected higher demand from China after the lifting of pandemic rules. Another major reason why crude prices have surged is the possible ban on Russian oil imports by European countries. Discussions are in place regarding EU sanctions against Russia in the wake of the war.

According to analysts, energy prices are expected to rise more as the impact of the war will further raise the global inflationary pressures. Energy firms may gain from these rising prices, and generate higher profits, and for this reason, the UK Government has recently accepted the call for a windfall tax on these firms. A £5 billion windfall tax has been levied on North Sea oil and gas producers to direct a part of their bumper profits towards providing financial support to the households struggling with rising food and fuel bills.

Let’s look at 3 North Sea oil and gas producers that UK investors may keep an eye on.

The global oil price has surpassed the $120 (£94.90) a barrel mark for the time since late March

Shell plc (LON: SHEL)

The shares of the oil and gas giant, Shell plc, were up by 1.05% as the market opened at around 8:00 AM (GMT+1) on 31 May 2022, at GBX 2,399.00. The FTSE 100 index constituent has provided its shareholders with a return of 78.28 % over the last one year as of 31 May 2022, while its year-to-date return stands at 48.05%. The current market cap of the company stands at £176,635.35 million.

BP plc (LON: BP.)

The shares of the oil and gas supermajor, BP plc, were up by 1.17% as the market opened at around 8:00 AM (GMT+1) on 31 May 2022, at GBX 438.55. The FTSE 100 index constituent has provided its shareholders with a return of 43.52% over the last one year as of 31 May 2022, while its year-to-date return stands at 32.95%. The current market cap of the company stands at £83,829.14 million.

Harbour Energy plc (LON: HBR)

The shares of the independent UK oil firm, which is the biggest North Sea operator, Harbour Energy plc, were up by 1.43% as the market opened at around 8:00 AM (GMT+1) on 31 May 2022, at GBX 384.30. The FTSE 100 index constituent has provided its shareholders with year-to-date return of 8.25% as of 31 May 2022, but its one-year return stands negative, at -6.76. The current market cap of the company stands at £3,506.84 million.

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