To The Moon

Although soaring gasoline prices represented one of the signature pain points of the year so far, the crippling inflation ratehas finally seeped into the hydrocarbon energy sector’s demand profile, thus leading to unusual weakness in pricing. Nevertheless, this favorable dynamic for consumers may not last that long — thus inviting a look at oil stocks to buy on the dip.

Primarily, the travel sector has been one of the surprising sectors to flourish despite the pain of inflation. For instance, the Fourth of July weekend droveairport traffic to a pandemic high. And while recent data shows that rising prices are finally hitting consumers in the wallet, a full normalization of society could boost the case for oil stocks to buy on the dip.

Second, investors should consider travel demand to Asia. Due tostrict coronavirus mitigation policies, Far East Asia remains an unattractive proposition for international tourists. However, once the pandemic fades away or if government agencies decide theeconomic painis not worth the restrictions, travel demand to the region will likely boon.

In such a scenario, you’ll want to focus on oil stock like Exxon Mobil$Exxon Mobil(XOM)$ to buy on the dip.

Diversified hydrocarbon energy giant Exxon Mobil has been on a see-saw ride throughout the new normal. Initially, the demand destruction that the Covid-19 crisis caused saw XOM stock plunge worryingly into the abyss. However, the anticipation of a recovery — followed by Russia’s invasion of Ukraine — saw shares rise to multi-year highs.

Now, arange of factors including economic  — many households driving less to save money — and monetary — the U.S. dollar is stronger compared to other currencies — have contributed to yet another headwind for petroleum products. In turn, over the trailing month, XOM is up more than 6%. Still, this discount may be the signal for oil stocks to buy on the dip.

With Exxon specifically, the company’s solid strengths in the balance sheet and across multiple profitability metrics make it attractive. As well, its diversified business should help XOM, especially as natural gas demand soars amid aninternational heatwave.

Lastly, Exxon reported its Q2 earnings results on Friday. And with shares up more than 4% on the day, it’s clear investors are happy with the news.