To The Moon

The oil market saw significant volatility as Brent crude and WTI oil futures surged by 5% following geopolitical tensions in the Middle East.

This spike was influenced by U.S. President Joe Biden's discussions about potential Israeli strikes on Iran's oil facilities after a missile attack on Israel.

This development has put pressure on global markets as they await Israel's response. The Israeli military's warnings in southern Lebanon further signal escalating tensions in the region.

Crude oil for delivery in November rose 5.29% or 3.71 to hit $73.89 a barrel, while the December Brent oil contract rose 5.13% or 3.79 to trade at $77.69 a barrel.

Market and Oil Will Continue To Be Influenced By Geopolitical Tensions Build Up

Geopolitical tensions, especially in the Middle East, have contributed significantly to this price surge. Ongoing conflict, including the recent Israeli strike on Iranian-linked assets in Syria, has amplified fears of wider disruptions to oil supplies from the region. Iran, being a major player in the Organization of the Petroleum Exporting Countries (“OPEC+”), plays a crucial role in global supply chains.

OPEC+ continues to restrict production to maintain higher prices, a strategy likely to persist into 2024. The group has extended its production cuts, further supporting oil prices despite signs of weaker global demand. Oil prices are expected to remain high through the rest of 2024, with Brent crude averaging $82.80 per barrel, driven by ongoing OPEC+ production cuts and concerns over supply security in the Middle East.

We as investors might want to take note of those energy or oil stocks, especially those with strong fundamentals and upward earnings revisions. These stocks would be well-positioned to benefit from the favorable conditions in the oil market.

Marathon Petroleum (MPC) Strong Free Cash Flow

$Marathon Petroleum(MPC)$'s market cap is currently $55.35B. The company's EPS TTM is $19.032; its P/E ratio is 8.71; and it has a dividend yield of 2.02%. Marathon Petroleum is scheduled to report earnings on 05 Nov 2024, and the estimated EPS forecast is $2.21.

The oil and gas refining and marketing sector, where Marathon Petroleum operates, saw an overall growth of 3.89%. Notable performers in the sector included Aemetis, Inc, PBF Energy Inc., and Delek US Holdings, Inc.

Marathon Petroleum is a significant independent refiner in the United States, with 13 refineries and a total throughput capacity of 3 million barrels per day. The company also produces renewable diesel at its facilities in Dickinson, North Dakota, and Martinez, California. Additionally, it operates midstream assets through its listed partnership, MPLX.

Technical Analysis - Marathon Petroleum (MPC) - MACD and MTF

If we looked at MPC, we are seeing a golden cross forming for the MA, and we have seen a nice surge yesterday (03 Oct), and for short tem, MTF is showing uptrend signal.

With the development of the crude oil due to the middle east tensions, we should be seeing more interest from this individual producers.

They could benefit from the oil shortage if the middle east oil supply is being cut or reduced.

Summary

As we should see more development in coming weeks on the middle east tensions, we could position ourselves on energy stocks which could benefit from the possible oil shortage coming from the tensions.

This might be a good time to look at MPC.

Appreciate if you could share your thoughts in the comment section whether you think MPC would continue its surge given that the tensions in middle east might build up.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.