In an effort to bring down the skyrocketing price of oil earlier this year, the Biden administration thought it would be a good idea to raid the country’s Strategic Petroleum Reserve, better known as the SPR. By the time they were done, under much scrutiny it might be added, a total of 180 million barrels had been removed and sold into the open market, including some sales to China.
While it might have seemed like a good idea, the reality is that the United States alone uses almost 20 million barrels of oil per day, so what was removed amounted to a paltry nine days of inventory. Oil prices did come down, but that was due to supply and demand forces, the Russia-Ukraine conflict and Covid lockdowns in China.
Last Friday, the U.S. Department of Energy said it would begin buying back oil for the Strategic Petroleum Reserve. The department will buy up to 3 million barrels for delivery in February, a senior official told reporters. This action was met with applause, as many had criticized the drawdown of the SPR as political and dangerous, as the withdrawals reduced levels in the reserve to about 380 million barrels, the lowest since 1984, raising concerns about energy security.
One group of stocks that may benefit are domestic energy producers. With many trading at the lowest levels in some time, now is a good time to pick up the mega-cap leaders that also pay big and dependable dividends. We screened our 24/7 Wall St. energy research database and found five top companies that look like outstanding ideas for 2023. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
APA
This company was long considered an industry leader when it was known as Apache, and the stock is perhaps offering one of the best entry points in the sector. APA Corp. (NYSE: APA) explores for and produces oil and gas properties. It has operations in the United States, Egypt and the United Kingdom, as well as has exploration activities offshore Suriname. It also operates gathering, processing and transmission assets in West Texas, as well as holds ownership in four Permian-to-Gulf Coast pipelines.
The company is one of the largest U.S. exploration and production companies, with 2.3 billion barrels of oil equivalent of proven reserves (63% liquids). It is an explorer, acquirer and exploiter, and a fiscally conservative company that has grown its reserves and production consistently via acquisitions and organic projects.
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