Since the first of June, MRO has
fallen 2.21% ending Friday off at $26.49. The drop in the stock price follows
the news that OPEC will continue to maintain their target production level of
$30 million dollars a day. With this
being said, the U.S. continues to cut production levels, with the rig count
being half of what it was at this time last year. Still, the U.S. has just
passed Russia as the biggest oil and natural gas producer in the world, as
congress considers legislation to permit the export of crude oil from the U.S.
Another supply increase to look out for is the possibility of Iran producing
gas again, as it is going to European energy giants asking for the $100 billion
needed to rebuild its oil industry. However, Iran will not have a large effect
on the global supply for a couple years.
Analysts covering MRO have an
average price target of $34.00. I believe the stock should be held, as it still
rests at 3.8% above the buy-in price. Analysts continue to upgrade the stock,
and predictions for the next earning update keep looking better. Although oil
prices have the possibility of falling, legislation allowing for the exportation
of oil will be a big win for MRO.
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