The 3 Best Oil Stocks to Buy in January 2024

Stocks to buy

In a world where energy is absolutely vital, oil companies continue to play an important role in its structure. Fossil fuels will continue to operate for many more years before a complete transition to 100% green energy occurs.

If oil companies is on your list of investments, be sure to explore these three best oil stocks to buy this month.

Equinor (EQNR)

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Equinor ASA (NYSE:EQNR) presents itself as a promising option by excelling in the oil and gas sector.

In Q3 of 2023, EQNR reported adjusted revenues of $8.02 billion and after-tax earnings of $2.73 billion, evidencing a solid financial performance.

Additionally, they achieved notable strategic milestones. Those include the commissioning of the Breidablikk field and the approval of the Snøhvit Future PDO project.

The Sparta project in the Gulf of Mexico has captured attention, with Equinor holding a 49 percent interest. Sparta, with a capacity of 100,000 barrels of oil equivalent per day, is expected to start production in 2028. And, recoverable resources estimates stand at over 250 million barrels. This investment reflects Equinor’s commitment to innovative, high-return projects.

In terms of capital distribution, they have announced cash dividends and share repurchases, showing their dedication to shareholders. A key aspect is the agreement with Germany’s SEFE. Equinor will supply 111 terawatt-hours of natural gas annually from 2024 to 2034. This is intends to cover a substantial part of German industrial demand. Further, the company focuses on the present and also looks to the future with agreements to supply large-scale, low-carbon hydrogen to SEFE from 2029 to 2060.

Suncor Energy (SU)

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Suncor Energy (NYSE:SU) is making waves in the energy sector, with many investors targeting it for their portfolios.

In the third quarter, the company posted impressive financial results. It boasts $3.6 billion in adjusted funds from operations and $2 billion in adjusted operating profit. Shareholders were pleased, as nearly $1 billion was returned to them through dividends and share repurchases.

Additionally, SU’s operational strength shines in total exploration and production output, which reached 690,500 barrels of oil equivalent per day. Refinery utilization was an impressive 99%. And strategic moves, such as the acquisition of the remaining interest in Fort Hills for $1.468 billion, shows Suncor Energy’s commitment to growth.

The fourth quarter of 2023 continues the success story, with production climbing to 808,000 barrels per day, the second highest in SU’s history. Notable achievements include strong results from several assets, including Oil Sands Operations, Firebag in-situ, Fort Hills, and Syncrude.

Finally, the company’s success continued with the safe commissioning of the Terra Nova flotation, production, storage, and offloading vessel in November 2023. Following this life extension project, production is expected to increase in the coming months.

Eni (E)

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Eni (NYSE:E) is an energy company that spans different areas, from exploration and production to sustainable mobility and renewable energy.

Despite challenges such as lower oil and gas prices, it demonstrates resilience with solid financial results in Q3 of 2023.

Impressively, E reported an adjusted profit before tax of €3.3 billion in the third quarter, with positive organic cash flow of around €1.5 billion. Despite net investments of €1.5 billion in acquisitions, the company maintained a solid focus on organic free cash flow, showing effective financial management.

Also, Eni expanded its renewable energy portfolio. By acquiring an 80% stake in photovoltaic plants in the U.S., its commitment to transitioning to cleaner energy sources is apparent. Further, the key milestone of the introduction of gas at the Tango FLNG facility in Congolese waters highlights Eni’s strength. It has a role in making the Republic of Congo a liquefied natural gas producing country.

Beyond the numbers, they have demonstrated their commitment to social and environmental initiatives in Congo. Specifically, Eni is supplying gas for power generation and promoting energy transition.

As of this writing, Gabriel Osorio-Mazzilli did not hold (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.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.

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