Equity Research & Investment Analysis

OPEC announced a major cut in production today, at 2.2 million barrels per day it is that largest production cut in history. However, domestic oil and natural gas producers are cutting their CapEx budgets as well, all in an effort to increase the price of oil. There will likely be a major spike in oil once economic activity begins to grow again.

While everyone has been talking about the stock market's recent slide, oil prices have actually dropped further and faster. In this article, we attempt to simply and rationally understand where the price of oil is heading in this highly reactionary market environment.

Petrobras, long maligned in our ratings methodology, this week was upgraded to a buy. We think that the valuation has come back down to earth and the growth potential makes this a worthy candidate for those looking for more international exposure in their portfolios.

Chevron is the fourth largest oil company in the world based on proven reserves, has impeccable financial strength, has been buying back its own shares aggressively of late and pays a generous cash dividend (recently increased by 12%) of $2.60 per share per year—a 3.1% yield based on its current price. While continued weakness in the price of oil will not benefit the shares, they have now reached an entry level that is justifiable for long-term investors based on our analysis.

Sky-rocketing oil prices have become a proverbial “hot-button” issue in this election year. The average cost of a barrel of oil was over $100 in the first quarter compared to just $58 in the first quarter of 2007. Consumers are frustrated by the prices at the pump, and businesses are feeling the pain too with [...]

Oil futures surged 4.7% ahead today and crossed over $100 per barrel for the first time since a brief period on January 3rd. The markets main concern is based in speculation that OPEC will cut production when it meets next month. Those fears were fueled by comments by Iran’s Oil Minister, who [...]