Hey there, when you check out those gas prices going up and down at the pump, you might be wondering how all that jazz affects the stock market for oil on Wall Street.
You know, it’s doable for peeps to dive into commodities markets and invest straight-up in oil. But, like, buying shares in oil companies could be more chill for regular folks, and it might be kind less risky, ya know?
So, like, there’s these different types of oil companies whose stocks are out there for everyone to buy. Each of them’s got their own, like, upsides and downsides .
But, like, you gonna keep it in mind that oil stocks, just like the companies they’re repping, will probably do better when oil prices are high. And their future vibes are tied up with all these big-picture things like politics, the economy, and rules that no one company can control.
Let’s take a closer look at the best-performing oil stocks in the S&P 500 Index over the past year
Best-performing oil stocks in the S&P 500 Index (One-year performance)
| Ticker | Company | Performance (Year) |
|---|---|---|
| MPC | Marathon Petroleum Corporation | 55.52% |
| SLB | Schlumberger Limited | 50.87% |
| BKR | Baker Hughes Company | 42.12% |
| HAL | Halliburton Company | 38.42% |
| PSX | Phillips 66 | 37.64% |
| VLO | Valero Energy Corporation | 27.32% |
| HES | Hess Corporation | 26.21% |
| XOM | Exxon Mobil Corporation | 19.28% |
| TRGP | Targa Resources Corp. | 16.47% |
(Source: Finviz, data as of September 13, 2023, for informational purposes only)
Please note that this stock data is current as of September 13, 2023, and is intended for informational purposes only, not for trading purposes.
5 Types of Oil Stocks
| Type | Description |
|---|---|
| Exploration and Production | Companies that search for and extract oil. Stocks can be volatile and are influenced by trends. |
| Oilfield Services | Companies that make drilling and extraction equipment. Profits depend on oil prices. |
| Refining | Refining companies convert crude oil into products. They do well when oil prices rise. |
| Integrated Oil Companies | These companies have production, services, and refining in-house, spreading risks but tied to prices. |
| Master Limited Partnerships | MLPs own energy infrastructure like pipelines. They offer high dividends but can be volatile. |
Now, let’s consider the pros and cons of investing in oil stocks
Pros
- Dividends: Oil stocks often yield high dividends, especially during prosperous times.
- Portfolio Balance: Oil stocks may not correlate with the broader market, potentially offsetting losses elsewhere.
Cons
- Volatility: Oil stocks can swing significantly with the oil market, leading to potential losses.
- Geopolitical Factors: Oil companies depend on global relations, making them vulnerable to geopolitical tensions.
- Environmental and Regulatory Concerns: Efforts to reduce fossil fuel use may impact oil stocks in the long run.
If you’re considering alternatives to investing in individual oil stocks, you might explore:
- Exchange-Traded Funds (ETFs) linked to oil for broader exposure.
- Direct investment in the commodities market, such as oil futures, but be cautious as it can be risky.
To buy oil stocks, follow these steps
- Choose a stockbroker: Select an online broker that suits your needs.
- Fund your account: Transfer money through various payment methods, but be mindful of fees and avoid high-interest debt.
- Do your research: Read up on the stocks you’re interested in through news coverage, analyst reports, and financial statements.
- Buy the stock: Use the stock’s ticker symbol to locate and purchase it through your chosen broker’s website.
Investing in oil stocks isn’t a one-size-fits-all decision, so consider your risk tolerance and market knowledge before diving in.
