Prolonged supply cuts along with rising demand should drive oil prices higher in the coming months. Given this backdrop, we believe mid-cap oil exploration companies Apache (APA), ARC Resources (AETUF), and PDC Energy (NASDAQ:) should see a substantial rise in their revenues and profit margins in the near term. Let’s discuss.
Supply cuts and rising demand with the reopening of economic activities have recently driven prices to six-year highs. And oil prices are expected to continue moving higher as supply cuts remain in place because OPEC+ failed to reach a production agreement.
OPEC+’s proposal to increase oil production for August has been postponed because Saudi Arabia and the UAE remain at loggerheads over the oil output. In light of these developments, former U.S. Energy Secretary Dan Brouillette expects oil to hit $100 a barrel soon.
This, coupled with declining inventories, should help mid-cap oil companies Apache Corporation (NASDAQ:), ARC Resources Ltd. (AETUF), and PDC Energy, Inc. (PDCE) generate higher revenues and profits in the near term. So, we think it could be wise to bet on these stocks now.
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