Brent crude oil has risen from about $84 to $98 in the previous two weeks as the Russia-Ukraine conflict has escalated. With this serving as a catalyst, here are a few stocks to watch when the oil market heats up again.
Stocks to Watch
Transocean Stock
Transocean Ltd. (NYSE:RIG) is a high-risk penny and one of the stocks to watch out for. The stock has rebounded 30% from its $2.33 intraday low, which it has touched twice in the previous several months. From a technical standpoint, this is crucial since the daily chart exhibits a double-bottom pattern that might act as a springboard for an upswing. With trading volume increasing, the stock (NYSE:RIG) might be aiming toward $4.00, a significant near-term resistance level.
Fundamentally, the world’s biggest offshore oil driller has a vast $6 billion backlog, perhaps the most appealing investment component. A shift away from outdated drillships and toward more modern rigs bodes well for efficient cash flow.
The constraints here include a heavily leveraged balance sheet due to the 2018 purchase of Cyprus-based Ocean Rig. This increased the company’s fleet size but at a high cost. Transocean now has five times as much debt as cash, making it difficult to borrow additional money, particularly as interest rates rise.
Overall, the risk-reward ratio seems to be somewhat tilted to the positive in this case. Most Wall Street analysts are positive about the company, and even the most pessimistic have price targets higher than the present level.
Marathon Stock: Is Marathon Oil a Profitable Investment?
Marathon Oil Corporation stock (NYSE:MRO) more than quadrupled in the first five months of the year before cooling down amid the oil price decline. It has been one of the quickest energy sector rebounders, rising 30% from its bottom in late September. Only Occidental Petroleum, EQT Corporation, and Hess Corporation have worse year-to-date returns in the S&P 500.
Analysts predict EPS of $1.25 in Q3, which is basically in line with Q2. Given that Marathon has outperformed Wall Street profits projections for seven consecutive quarters, the company is shaping up to be an attractive Q3 results bet. This makes it one of the best stocks to watch out for.
Halliburton Stock: What Are the Growth Drivers for Halliburton?
Halliburton Company (NYSE:HAL), a prominent worldwide producer of oil drilling equipment and services, is taking a new approach to the energy boom. When oil prices and drilling activity rise, so does the demand for Halliburton.
Last week, Halliburton stock (NYSE:HAL) went on an impressive five-day run that ignored the market’s late-week drop. This is a company that is 33% below its post-Covid high and selling at barely 11x the consensus 2023 EPS projection. In contrast, the S&P 500 is trading at around 15 times next year’s profits forecast.
The Street’s prediction of 38% profit growth in 2023 is mainly based on oil price expectations, but Halliburton’s technological efforts also play a role. New digital and automation services that help clients be more efficient are intended to generate additional income streams via the Halliburton 4.0 initiative. This oil stock’s price, dividend, and potential for growth acceleration lead to a greater upside and makes this one of the stocks to watch.
Featured Image- Unsplash @ Austin Distel
Author Okoro Chinedu 
