Here’s How Oil Stocks Are Performing in 2020

2020 has indeed been a pretty rough year so far due to the sudden coronavirus pandemic. Global economies have taken a different turn as the pandemic worsens, and different sectors of the economies are all dealing with the impact of the coronavirus pandemic.

A few weeks ago, the stock market crashed, falling from an all-time bullish high of 11 years. Even as different factors led to the crash of the stock market, most especially the coronavirus pandemic, the crash created a ripple effect across other financial markets.

The recent oil market crash happens to be the worst oil market crash in history, with oil prices in the negative. In past times, oil prices have fallen to very low levels as a result of a massive economic decline, however, this is unlike any economic decline. Oil producers and dealers are on a run for their money as uncertainties continue to wrap around the economy.

Following the recent oil market crash, a large shale producer (Whiting Petroleum Corp) and a major offshore driller (Diamond Offshore Drilling) have filed for bankruptcy. There is no doubt that in a matter of time many other smaller oil companies would join them. Oil prices have since fallen more than 70% due to a decrease in demand, as well as the consumption of gasoline in the US. Though there are other industries that have been hit far worse than the oil industry, it may still take a while before the large percentage of the industry could recover.

According to some experts at Motley Fool, the “oil prices are only a part of the problem” as the main issue has to do with lack of oil storage as there are limited spaces to store the extra oil being pumped by producers due to a fall in demand.

‘Big Oil’

Regardless of how badly the oil market has been impacted by the coronavirus pandemic, there are some oil companies that are strongly weathering the storm. These companies have the financial capacity and diversified operations to thrive in what seems to be a failing economy. The companies in the group are collectively known as “Big Oil” and they include Chevron (NYSE: CVX), Dutch Shell (NYSE: RDS.A) (NYSE: RDS.B). Exxon Mobil (NYSE: XOM), Conoco Phillips (NYSE: COP), and Phillips 66 (NYSE: PSX).

The “Big Oil” companies have so far proven to be the best performing oil stocks in these times and may be considered as the “safest investments” in the oil industry. These oil stocks are able to perform well in this current time and in future times to come.

Best Oil Stocks in Q2 2020

Schlumberger NV (NYSE: SLB): Schlumberger N.V is a company that provides technology for the drilling, production and processing of oil, and reservoir characterization to the oil and gas industry. The company is engaged in three segments: Drilling Group, Reservoir Characterization Group, Production Group, and Cameron Group. The Drilling Group is responsible for finding the major and important technologies used in drilling and positioning of oil and gas wells. The Reservoir Characterization Groups is made up of major technologies used in finding and defining hydrocarbon resources. While the Production Group is made up of major technologies required in the production of oil and gas reservoirs; it also includes Well Services, Integrated Production Services (IPS), Wells Services, and Schlumberger Production Management (SPM). The Cameron Group is made up of technologies required for pressure and flow control for drilling and intervention rigs, as well as oil and gas wells and production facilities.

BP (LON: BP): BP p.l.c is a global energy company that operates in Europe, North and South America, Africa, Australia, and Asia. The company basically provides customers with oil and gas products to serve different purposes such as transportation, electricity, and industrial activities. The company operates in three segments: Upstream, Downstream, and Rosneft. The Upstream segment includes the exploration of oil and gas, field development, and production; midstream transportation, processing, and storage; marketing and trading of natural gas liquids (NGLs) and liquefied natural gas (LNG). This segment also includes processing facilities and export terminals, ownership and management of crude oil and natural gas pipelines, NGLs processing business, and LNG processing facilities and transportation. The Downstream deals with the refining, manufacturing, marketing, transportation, supply and trade of crude oil, petroleum, and other petrochemical products to retail customers. Its products include gasoline, diesel, aviation fuel, lubricants, and other related products to customers in the automotive, industrial, marine, and energy market. The Rosneft segment majorly deals in the exploration and production of hydrocarbons including bitumen, bunkering, jet fuel, and lubricants. The company owns and operates 13 refineries based in Russia under the Rosneft segment. It also holds stakes in 3 refineries in Germany, and 1 each in India and Belarus.

Chevron (NYSE: CVX): Chevron Corporation is a multifaceted oil and gas company formerly known as ChevronTexaco Corporation until it changed its name to Chevron Corporation in 2005. The company manages its investments in subsidiaries and affiliates and makes provision for financial, management, administrative, and technology support to both international and US subsidiaries. The company operates in two segments: Upstream and Downstream. The Upstream segment primarily operates in the exploration, development, and production of crude oil and natural gas; liquefaction, regasification and transportation; transportation of crude oil through international oil export pipelines; processing, transporting, storage, and marketing of oil and gas products, and a gas-to-liquids plant. The Downstream segment primarily operates in the refining of crude oil into finished petroleum products; marketing of refined products and crude oil; transporting of crude oil and refined products; manufacturing and marketing of petrochemicals. In addition to its oil and gas business, Chevron Corporation is into cash management and debt financing services; real estate, insurance operations, and technology businesses.

Exxon Mobil (NYSE: XOM): Exxon Mobil Corporation is an energy company that operates primarily in the exploration, production, transportation, and sale of crude oil and natural gas. It also deals with the manufacture, transportation, and sale of petroleum products; manufacturing and marketing of petrochemicals including aromatics, olefins, polyethylene and polypropylene plastics, as well as other specialty oil and gas products. The company is engaged in four primary segments: Upstream, Downstream, Chemical, Corporate and Financing. The Upstream consists of the exploration for and production of crude oil and natural gas. The Downstream consists of the manufacturing and sale of petroleum products. The Chemical segment deals with the manufacturing and sales of petrochemicals. The Corporate and Financing segment consists of exploration and development activities in projects and properties located across the United States, extending to Europe, Africa, Canada/South America, and Australia/Oceania.

Royal Dutch Shell (AMS: RDSA): The Royal Dutch Shell plc is a global oil and gas company known for its exploration of crude oil and natural gas around the world. Its oil exploration covers both the conventional fields and unconventional sources such as tight rock, shale and coal formations. The company operates in three segments: Upstream, Downstream, Integrated Gas, and Corporate. The Upstream segment consists of exploration for and extraction of crude oil, natural gas, and natural gas liquids for the production of fuels and related products. This segment also includes the transportation of oil and gas, and Oil Sands (commonly found when bitumen is extracted from mined oil sands). The Downstream segment primarily operates in oil products, chemical manufacturing, and marketing activities. The Integrated Gas segment consists of the liquefaction and transportation of gas, as well as the conversion of natural gas to liquids to be used as fuel.

Conoco Phillips (NYSE: COP): Conoco Phillips is an independent oil and gas company that deals with the exploration and production of oil and gas. It also deals with the exploration, production, transportation, and marketing of crude oil, natural gas, bitumen, liquefied natural gas (LNG) and natural gas liquids. The company’s six segments are classified by different regions where it is operational. They include Alaska, Canada, Europe, and North Africa, Asia Pacific and the Middle East, Lower 48, and Other International. The Alaska segment consists of the exploration, production, transportation, and marketing of crude oil, natural gas, natural gas liquids, and LNG. The Canada segment deals with the development of oil sands. The Europe and North Africa segment deals with operation and exploration activities in Norway and Libya. The Asia Pacific and Middle East segment deal with exploration and production operations in China, Malaysia, Indonesia, and Australia. The Lower 48 segment covers operations in the United States Lower 48 states including the Gulf of Mexico.

Marathon Oil (NYSE: MRO): Marathon Oil Corporation is an oil exploration and production company. It comprises of two segments: United States E&P and International E&P. As their titles imply, the United States E&P segment is engaged in the exploration, production, and marketing of crude oil and condensate, natural gas, and natural gas liquids (NGLs) in the United States. While the International E&P segment consists of the exploration, production, and marketing of crude oil and condensate, natural gas, and NGLs outside of the United States.

Apache (NYSE: APA): Apache Corporation is an independent energy company which deals with the exploration, development, and production of crude oil, natural gas, and natural gas liquids (NGLs). The Texas-based company was founded in 1954. Its production segments consist of the United States, the United Kingdom North Sea, and Egypt. The company also pursues exploration interest in Suriname and has three onshore regions in North America, namely: The Permian region, the Midcontinent region/Gulf Coast region. It also holds onshore assets located in Egypt’s Western desert and offshore assets located in the North Sea region of the United Kingdom. By the close of 2019, Apache Corporation had approximately 551 million barrels reserves of crude oil, 186 million barrels of natural gas liquids (NGLs), and 1.6 trillion cubic feet of natural gas.

Phillips 66 (NYSE: PSX): Phillips 66 is an energy manufacturing and logistics company that operates across the US It majorly operates in four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). Its Midstream segment consists of gathering, processing, transporting, and marketing of natural gas; transporting, storing, fractioning, and marketing of natural gas liquids (NGLs) in the US. Its Chemical segment is concerned with the company’s equity investment in Chevron Phillips Chemical Company LLC (CPChem), which is engaged in the manufacturing and marketing of petrochemicals and plastics. The Refining segment is engaged in the buying and selling, and refining of crude oil and other feedstocks in the US and Europe. While the Marketing and Specialties segment deals with purchasing for resale and marketing of refined petroleum products such as aviation fuel, gasoline, and distillates.