Go Long with ConocoPhillips on Popping Oil Price

The largest US-based exploration and production giant ConocoPhillips (NYSE: COP) could be the best stock pick if you seek to take advantage of increasing oil prices. This is because COP has the lowest breakeven level while the sharp growth in prices would help the company to post big profits in 2021 along with offering hefty dividends.

Oil prices soared to the highest level in the last thirteen months, thanks to a recovery in economic activity and improving supply and demand dynamics. Moreover, the market specialist believes this supercycle will persist for many years to come.

Crude Oil Chart Daily

WTI futures rallied almost 24% year to date to around $60.52/bbl and Brent is trading around $63.61/bbl – both hitting 13-month highs.

Hussein Sayed, chief market strategist at FXTM said:

The robust recovery in oil prices and industrial metals over the past couple of months is driving the idea of a new commodities supercycle in which prices remain above-trend for many years to come.”

ConocoPhillips Offers a Buying Opportunity

Although shares of ConocoPhillips rallied 17% since the beginning of this year, the shares of the largest exploration & production giant are still down 21% in the last twelve months. The company has generated lower than expected loss for the fourth quarter. The company’s average realized crude prices stood around $33 per barrel in the fourth quarter.

ConocoPhillips Stock Quote

However, the fundamentals improved significantly in the past two months, with oil trading above $60 a barrel. The company is likely to move back to profitability that will begin from the first quarter of 2021. The dividends are among the biggest factor when it comes to investing in ConocoPhillips. The company has sustained its dividends during the pandemic year and it appears that shareholders will get a big dividend boost during the second half of the year.

Siraj Sarwar - Lead Analyst
@tradethedayfx
Siraj Sarwar has been performing analysis on the stock market, equity research and general business consultation. He regularly contributes articles on economics, commodities, and equities to the world's leading websites, including Trade the Day, SeekingAlpha, TheStreet, and MSN.
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