Last month, U.S. President Joe Biden authorized the release of 50 million barrels of crude oil from America’s strategic reserves. It was an unusual move, but one that Biden took to help lower energy prices as winter arrives and Americans struggle with rising costs due to high inflation.
Before Biden announced the release, oil prices had been at a three-year high of more than $86 per barrel. The price of Brent crude oil has since fallen to just over $70 per barrel, suggesting that Biden’s plan is having an immediate impact (the Omicron variant of Covid-19 has also affected oil prices).
However, the strategic release has put pressure on oil producers and placed the U.S. government at odds with the Organization of the Petroleum Exporting Countries (OPEC+) and allies such as Russia that are a de facto cartel and had rejected repeated calls from Washington, D.C., to pump more oil and increase global output heading into the winter months.
Here are three oil stocks to watch following the Biden release plan.
Oil Stocks to Watch: ExxonMobil (XOM)
We’ll start with the largest U.S. oil producer, Irving, Texas-based ExxonMobil. One of the biggest companies in the world with annual revenues of nearly $180 billion and 72,000 employees worldwide. In 2020, ExxonMobil averaged more than 2.3 million barrels of oil per day, behind only Saudi Aramco and PetroChina (NYSE:PTR) in terms of production.
With brands that include Mobil and Esso, ExxonMobil is a force in the worldwide oil and gas business, with a global footprint. Since 2015, the company has discovered 18 oil fields off the coast of Guyana in South America that collectively hold more than eight billion barrels of oil.
In terms of its stock, after a difficult 2020, shares of XOM have risen 51% year-to-date and now trade at just over $62 each.
Next, we come to the second-biggest U.S. oil company, and the only one that famed investor Warren Buffet owns, Chevron.
Headquartered in San Ramon, California, Chevron today has a presence in 180 countries around the world and is involved in every part of the oil business, from exploration and extraction to refining and transportation.
It is Chevron’s diversification within the industry that is reportedly what Buffett likes about the company. In fact, the “Oracle of Omaha” added to his stake in CVX stock during this year’s third-quarter. Year-to-date, Chevron’s stock is up 40% at $118.30. Although most of those gains were achieved in the first quarter, in the past six months, the share price has risen 9%.
Oil Stocks to Watch: Shell (RDS.A)
The company has dropped “Royal Dutch” from its name, but Shell remains the biggest oil company, and largest company in all of Europe. Now co-headquartered in The Hague, Netherlands and London, England. Following a tax skirmish with the Dutch government, Shell today produces about two million barrels of oil per day.
Like Chevron, Shell is involved in both upstream and downstream aspects of the oil industry with 86,000 employees globally. As mentioned, Shell has been undergoing several brand and corporate changes this year after it fought with the Dutch government over royalty taxes and was accused of hiding billions of dollars in offshore tax havens. Year-to-date, RDS.A stock is up 27% at $45 per share, including a 10% gain over the past six months.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.