The Zacks Analyst Blog Highlights: Earthstone Energy, Canadian Natural, and PDC Energy


For Immediate Release

Chicago, IL – January 3, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Earthstone Energy

ESTE

, Canadian Natural Resources

CNQ

, and PDC Energy

PDCE

.

Here are highlights from Thursday’s Analyst Blog:


Bullish Signs in U.S. Oil Demand as End of Year Approaches

U.S. oil prices moved higher on Dec 29 after a weekly report from the Energy Information Administration (“EIA”) showed draws in crude and fuel stockpiles. Easing concerns about the potential Omicron-related fall in demand also boosted the commodity.

On the New York Mercantile Exchange, WTI crude futures gained 58 cents, or 0.8%, to settle at $76.56 a barrel, its highest finish since Nov 24. That puts the commodity on track for 58% gains in 2021, following last year’s demand destruction and price plunge.

Coming back to the holiday-shortened week ending Dec 24, let’s review the EIA’s Weekly Petroleum Status Report.

Analyzing the Latest EIA Report


Crude Oil:

The federal government’s EIA report revealed that crude inventories fell 3.6 million barrels. An uptick in exports and continued strength in refinery demand accounted for the stockpile draw with the world’s biggest oil consumer even as U.S. production rose back. Total domestic stocks now stand at 420 million barrels — 14.9% less than the year-ago figure and 7% lower than the five-year average.

On a somewhat bearish note, the latest report showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) increased 1.1 million barrels to 34.7 million barrels.

Meanwhile, the crude supply cover was down from 26.9 days in the previous week to 26.7 days. In the year-ago period, the supply cover was 34.7 days.

Let’s turn to the products now.


Gasoline:

Gasoline supplies decreased for the second time in three weeks. The 1.5-million-barrel drop is attributable to sharply higher demand. At 222.7 million barrels, the current stock of the most widely used petroleum product is 5.9% less than the year-earlier level and 6% below the five-year average range.


Distillate:

Distillate fuel supplies (including diesel and heating oil) fell last week after climbing the week before. The 1.7 million-barrel decrease primarily reflected higher demand. Current inventories — at 122.4 million barrels — are 19.5% below the year-ago level and 14% lower than the five-year average.


Refinery Rates:

Refinery utilization, at 89.7%, inched up 0.1% from the prior week.

Final Words

WTI settled at a five-week high yesterday, following a sizeable dip in crude, gasoline and distillate inventories. Despite some downside risk associated with the Omicron variant-induced demand concerns, the

Oil/Energy

market has undoubtedly bounced back from last year’s pandemic-driven slump in consumption and prices.

Just recently, the four-week average for petroleum demand stood at an all-time high of 23.2 million barrels a day, indicating little reason for concern at this point. On the other hand, U.S. commercial stockpiles are down more than 16% since mid-March. Further, it appears that fears of a slowdown in oil demand recovery from the Omicron variant are starting to subside, with the strain likely to be less deadly than expected. At the same time, the available vaccines might be effective in neutralizing it.

To take advantage of oil’s solid demand backdrop going into the New Year, one might build a position by tapping into the below-mentioned Zacks Rank #1 (Strong Buy) oil companies.

You can see


the complete list of today’s Zacks #1 Rank stocks here


.


Earthstone Energy

: Earthstone has a projected earnings growth rate of 112.2% for next year. The Zacks Consensus Estimate for ESTE’s 2022 earnings has been revised 24.4% upward over the past 60 days.

Earthstone beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 93.2%. ESTE shares have gained around 129.1% in a year.


Canadian Natural Resources

: Canadian Natural Resources has an expected earnings growth rate of 11.1% for next year. The Zacks Consensus Estimate for CNQ’s 2022 earnings has been revised 9.1% upward over the last 60 days.

Canadian Natural Resources beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 67.4%, on average. CNQ has gained around 80% in a year.


PDC Energy

: The company has a projected earnings growth rate of 29.2% for next year. PDC Energy’s consensus estimate for 2022 has been revised 18.3% upward over the past 60 days.

PDCE beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 51.1%. PDC Energy has rallied around 153.9% in a year.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss

.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit

https://www.zacks.com/performance

for information about the performance numbers displayed in this press release.


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