The oil and energy industry has been by far the best performer in 2022 in light of the Russian invasion of Ukraine, which caused energy prices to skyrocket.
The rise in energy prices was followed by a surge in inflation across the globe, further exacerbating the difficult investing conditions of 2022.
In such an environment that is seeing energy prices jump, Finbold analyzed some of the top oil and gas stocks that jumped over 100% in 2022.
BP Prudhoe Bay Royalty Trust (NYSE: BPT)
BP Prudhoe Bay Royalty Trust, initially formed in 1989, has the sole purpose of administering the Royalty Interest. In essence, this means that the Trust is entitled to a royalty of 16.4246% on the first 90,000 barrels in the Prudhoe Bay Field by BP Alaska.
Once expenses are subtracted, the per barrel royalty is calculated and paid out to unit holders each quarter in the form of a dividend. Therefore, for the performance of the stock, the most important variable is the chargeable cost and cost adjustment factor. Accordingly, oil below $100 could spell trouble for the holders as the yield may decrease, dragging the stock price.
Year-to-date (YTD), the stock jumped 203.47%, though some volatility has been seen during oil’s downturn. BPT is one of the better-performing stocks in the Oil, Gas & Consumable Fuels industry, outperforming 98% of 377 stocks in the same industry.
Scorpio Tankers (NYSE: STNG)
Scorpio’s run has been attributed to an increase in demand for tanker shipping services, where the shortage of refined petroleum products was the catalyst. With the energy crisis in full swing, the rise in oil shipping services will likely continue to climb, possibly enabling the stock to make further gains in the near term.
YTD, the stock is up 198.21%, with STNG outperforming 96% of 377 stocks in the Oil, Gas & Consumable Fuels industry. The price action left the shares in the upper part of their 52-week range, bouncing between the 200 and 50-day moving averages.
Technical analysis shows a support zone from $39.25 to $40.29 and a resistance line at $44.97.
Wall Street analysts rate Scorpio stock a ‘moderate buy,’ with the average price in the next 12 months reaching $46.80, 12.50% higher than the current trading price of $41.60. Notably, out of 5 Wall Street analysts, 4 have a ‘buy’ rating, and 1 has a ‘sell’ rating.
Occidental Petroleum (NYSE: OXY)
Occidental was a popular firm among market participants in its own right; however, its popularity skyrocketed after the legendary investor Warren Buffett decided to buy up over 20% of the company’s shares on the open market.
The firm seized on the opportunity and further increased its popularity by exploring carbon capture, transportation, sequestration, and utilization opportunities, trying to be more ‘green.’
YTD, shares are up 106.25%, with OXY outperforming 89% of the stocks in the Oil, Gas & Consumable Fuels industry.
In the last month, OXY has been trading in the $57.43 to $69.51 range, which is quite broad, with neutral short- and long-term trends. Technical analysis points to a support zone from $57.23 to $58.72 and a resistance line at $67.20.
Analysts rate the shares a ‘moderate buy,’ predicting that in the next 12 months, the stock could trade at $76.67, 19.68% higher than the current trading price of $64.06. Notably, out of 13 TipRanks analysts covering OXY, five have a ‘buy’ rating, seven a ‘hold’ rating, and only one a ‘sell’ rating.
Despite performing superbly in 2022, past performance is no indication of future returns. However, high energy prices will see the shares of the above-mentioned companies and Trust remain elevated, until demand destruction brings, and keeps oil sub $80, which could be far off.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.