To The Moon

It was 8 days ago, on a lazy Sun, 02 Apr that the OPEC+ cartel made a surprise worldwide announcement.

All members have “volunteer” to cutback that their output production respectively.

The accumulated effect would be an effective reduction of 1.18 million bpd daily, in a bid to keep oil prices “stable”.

The “self-imposed” action will commence from May 2023 onwards until end 2023 (for now).

When my post was published on Mon, 03 Apr evening (click here to read it ! ) I had my eyes set on Energy / Oil stocks.

For a moment, I thought I have missed the boat because oil price surged to $81.18 per barrel on Mon morning.

Fortunately, as luck would have it, official data / reports that came trickling in throughout the week served to dampen market sentiments.

It was a one, two, three knock out - day after day.

• ISM Purchasing Manager Index (Mon, 03 Apr) with a weak reading of 46.3; indicating bubbling recession fears weighing on businesses.

• Jobs Opening & Labout Turnover surveys (JOLTs - Tue, 04 Apr) fell to a 21 month low further stoking concerns that US economy was heading for a recession; albeit a hard landing.

• ADP Mar Private Payrolls (Wed, 05 Apr) also reported a -31% weaker job growth than Wall street expectations; denting market confidence again !

By the time market had a break, it was Thu (06 Apr) - last trading day of the week with most exchanges closed on Good Friday.

With the long weekend behind us and on the cusp of a new 5-day trading week- I think there is possibly an opportunity to stock up on oil or energy stocks.

Both Brent crude futures and West Texas Intermediate crude are at a level last seen in Nov 2022.

This came about only after last Sun (02 Apr) OPEC+ surprised announcement.

With 3 weeks to go before production cutback begins, I think supply will be tight going into H2 2023. This implies prices moving higher from here as we go through the year. Agree ?

Of the 3 most quoted reasons for Oil prices “recovery” later this year :

• Futher production cuts from OPEC+

• Geopolitical tensions in the Middle East

• Rebounding demand from China.

I still find the “chinese demand rebound” a not a very compelling reason because the Chinese economy is only forecasted to grow on an average 5.4% this year only, hardly having a hungry & healthy appetite to drive demand up.

So, This Is What I Am Eyeing :

MRO stock price as of 06 Apr 2023 (Thu)

Why $Marathon(MRO)$ ? Rhetorically Why Not Marathon Oil ?

1. Marathon Oil (MRO) is a leading independent exploration & production company with operations in the US and international markets.

2. It has a low-cost structure, a strong liquidity position, and a disciplined capital allocation strategy that focuses on generating free cash flow and returning capital to shareholders.

3. Incidentally, Marathon Oil has also been reducing its greenhouse gas emissions & investing in low-carbon technologies to enhance its environmental performance.

4. Enticingly, it has announced on 25 Jan 2023 to raise its quarterly dividend by +11% to $0.10 per share.

5. The American Association of Individual Investors have also analysed and categorized Marathon Oil as having “Deep Value” rating (see below results).

• I will be reminding myself to be patient if and when bidding for Marathon Oil stock.

• Will not rush through and buy at a “higher” price.

• Do you think you will be interested in Oil stock ?

• If not, what other stock/s will you be interested in ? Share your thoughts here !

Please give a “LIKe” ok. Thanks. Your rating is very important to me. Tks Tks !

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