After a dreadful November sell-off, West Texas Intermediate crude oil has roared back past the $75 a barrel level and looks to be headed to $80, as OPEC has given every indication that they will be holding current production levels to protect that $75 and higher price point. While all the shut-in Gulf of Mexico production has returned to 100% since hurricane Ida, Permian Basin producers have continued to watch their production levels as free cash flow is now the name of the game over production growth.
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Many top oil strategists across Wall Street are warning that severe shortages of oil and natural gas could be headed our way in 2022. Goldman Sachs noted recently that oil could hit $100 a barrel, as demand might reach a new record high in the next two years. The Goldman Sachs analysts predict a new high in oil demand in 2022 and again in 2023. Both international benchmark Brent crude and U.S. crude prices spiked above $80 before the November sell-off, as demand continues to outstrip supply.
We screened our 24/7 Wall St. database looking for the best dividend-paying energy stocks rated Buy at major Wall Street firms and found four that are cheap and have some serious upside potential. While we focused on companies that are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
BP
This is one of the premier European integrated oil giants, and Goldman Sachs is very positive on the shares. BP PLC (NYSE: BP) engages in the energy business worldwide. It produces and trades in natural gas; offers biofuels; operates onshore and offshore wind power and solar power generating facilities; and provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage and storage.
The company is also involved in the convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants. It is involved in refining, supply and trading of oil products, as well as operation of electric vehicle charging facilities. In addition, it produces and refines oil and gas, and it invests in upstream, downstream and alternative energy companies, as well as in advanced mobility, bio and low carbon products, carbon management, digital transformation and power and storage areas.
Shareholders receive a 4.69% yield. The Goldman Sachs price target for domestic BP stock shares is $45, which compares with a $34.17 consensus target. The final trade Thursday was reported at $26.69 per share.
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