Last week, OPEC announced its first crude oil production cut since 2008. Shares of oil stocks have skyrocketed in the days since the announcement.
While oil investors are rejoicing, some analysts are not so convinced about the impact that the OPEC deal will actually have on the market. OPEC countries produced an average of 33.24 million barrels per day (BPD) of crude in August. Under the new agreement, OPEC will be reducing that output down to 32.5 million-33.0 million.
However, Saudi Arabia typically dials back its production following the summer months anyway.
More importantly, OPEC member Iran plans to boost its oil production from around 2.6 million BPD to 4 million BPD. Russia, the third largest oil producer in the world, is also not part of the deal.
JPMorgan analysts were certainly not impressed by the deal’s impact on oil prices in the near term. Following the OPEC deal, the firm cut its Q4 WTI crude price forecast from $55 per barrel to $48 per barrel. It also dropped its fiscal 2017 price target from $56.75 per barrel to $53.75 per barrel.
For long-term oil investors, however, the spirit of the deal represents yet another milestone in the oil market’s slow recovery process. Here are three stocks that should benefit.
Oil Stocks to Buy: EOG Resources Inc (EOG)
Oil E&P stocks are typically considered…
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