Six Oil Trends to Watch in 2020

FN Media Group Presents Oilprice.com Market Commentary

LONDON, Jan. 8, 2020 /PRNewswire/ -- This is what the bears don't get about oil stocks: These are no longer the reckless, wasteful, binge years of the shale boom. The smart companies have adapted to a new reality. Now, it's about dramatic new offshore discoveries that are being brought online in record speed.   Mentioned in today's commentary includes:  Exxon Mobil Corporation (NYSE:XOM), ConocoPhillips Company (NYSE:COP), Hess Corporation (NYSE:HES), Halliburton Company (NYSE:HAL), Phillips 66 (NYSE:PSX).

It's about brilliant new well-completion designs that enhance productivity.  It's about integrated giants who win, either way. It's about extremely ambitious small-caps that slip into new venues and scoop up massive basins when no one's looking. It's about ingenuity on multiple levels that translates into something for every investor appetite. 

Here are 6 trends to watch in 2020, and between them they cover every sort of risk-vs-reward level out there: 

#1 The Best Recovery

If dividends are what you're after, look no further on the oilfield. Even the volatility of the oil and gas market over the past years have failed to disrupt ExxonMobil's (XOM) dividend payouts. 

First, the supergiant's Q3 earnings report last week was better than expected, with earnings of 75 cents per share--compared to analyst estimates of 67 cents. Sales, at $65.05 billion, also beat estimates. And it's planning to double its cash flow through 2025. 

One of the most exciting things is the new oil that will come online from the superstar Guyana-Suriname Basin and Exxon's 14 finds that just put Guyana on the oil map. It's also got new production and infrastructure coming online in the Permian basin, not to mention a major LNG project in Mozambique. 

Our assessment is that Exxon is recovering nicely, and 2020 should see much better performance, particularly following the divestment of its North Sea assets for a cool $3.5 billion.  But overall, the great thing about Exxon is that no matter how oil prices fluctuate, this integrated giant is covered. Lower oil prices help its upstream assets, while higher prices boost the downstream. 

#2 Deliverance

Few oil stocks shared in as much glory as ConocoPhillips (COP) when it comes to Q3 earnings. Not only did COP report a net income increase to $2.74 share, or $3.056 billion, but it also managed adjusted earnings of $914 million, or $0.82 per share.