The rise in crude oil prices lifted TRGP, SLB, HAL, BKR & OKE

This year, the energy sector in the US stock market has outperformed the $S&P 500(.SPX)$ , and the price of crude oil has been on a tear. The WTI crude oil futures have jumped over 35% in the past three years, fueling a significant increase in free cash flow for US oil stocks. As profits rise, so do stock prices!

Here are five US oil stocks that have the highest correlation with $WTI Crude Oil - main 2406(CLmain)$ prices and are also rated as "buy" by Bank of America.

1.Targa Resources Corp

Analysts predict that $Targa Resources(TRGP)$ will benefit from overbuilding in the Permian Basin's natural gas liquids pipeline system, and the company still expects production growth in the Midland Basin by 2024.

TRGP stock has a whopping 52.3% correlation with WTI crude oil prices, and its target price is $126, representing a 12.7% upside potential compared to its closing price on April 18th.

2.Schlumberger

$Schlumberger(SLB)$ is highly correlated with the bright spots of the current oil market cycle - international and offshore production. Its combination of pricing power, operating leverage, and capital expenditure discipline makes it a cash cow.

SLB stock has a 47.9% correlation with WTI crude oil prices, and its target price is $62, representing a 21.7% upside potential.

3.Halliburton

$Halliburton(HAL)$ has a solid North American business and strong international revenue growth. Its valuation is quite attractive relative to its financial performance.

If HAL continues to return over 60% of its free cash flow to shareholders in 2024 and 2025, the returns will represent around 10% of the stock's current market capitalization.

HAL stock has a 45.4% correlation with crude oil prices, and its target price is $43, representing an 11.3% upside potential.

4.Baker Hughes

Despite being the top loser on this list with a 5% decline in stock price this year, $Baker Hughes(BKR)$ is a global leader in liquefied natural gas (LNG) liquefaction with a market share of over 90%. It also has multiple growth paths.

BKR stock has a 36.5% correlation with crude oil prices, and its target price is $37.50, representing a 16.5% upside potential.

5.Oneok Inc.

$ONEOK Inc(OKE)$ offers a juicy 5% dividend yield. According to OKE's plan, 75% to 85% of its operating cash flow after capital expenditures will be returned to shareholders through dividends and buybacks in the next four years.

The company also has enough discretionary cash to complete its buyback plan by 2025. OKE stock has a 26.7% correlation with crude oil prices, and its target price is $86, representing a 10.4% upside potential.

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