Rising Oil Prices Drive Investment in Energy Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy DVN?
Source: NASDAQ.COM
- Oil Price Surge: Oil prices have surged from around $57 per barrel at the beginning of the year to nearly $88, creating opportunities for investors to protect their portfolios against high oil price environments despite the unpredictable future trajectory.
- Strategic Adjustments: Both Devon Energy and Diamondback Energy have adjusted their strategies to thrive in a downtrend that began in fall 2023, ensuring profitability at $50 oil, thus allowing for additional gains when prices rise.
- Merger Synergies: Devon's impending merger with Coterra Energy will nearly double its acreage in the Delaware Basin, resulting in a break-even price of less than $40 per barrel, significantly enhancing the company's competitive position in the market.
- Cash Flow and Valuation Advantage: Both companies trade at extremely low price-to-free cash flow multiples, and combined with favorable valuations and low break-even prices, they present compelling investment opportunities, especially in a scenario where oil prices may remain elevated for an extended period.
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Analyst Views on DVN
Wall Street analysts forecast DVN stock price to fall
20 Analyst Rating
18 Buy
2 Hold
0 Sell
Strong Buy
Current: 46.190
Low
41.00
Averages
45.53
High
55.00
Current: 46.190
Low
41.00
Averages
45.53
High
55.00
About DVN
Devon Energy Corporation is an oil and gas producer in the United States with a diversified multi-basin portfolio headlined by an acreage position in the Delaware Basin. The Company is primarily engaged in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). It owns a portfolio of assets located in the Delaware Basin, Rockies, Eagle Ford and Anadarko Basin. The Delaware Basin operates in southeast New Mexico and across the state line into west Texas. It offers exploration and development opportunities from many geologic reservoirs and play types, including the oil-rich Wolfcamp, Bone Spring, Avalon and Delaware formations. Its Rockies development consists of its Williston Basin and Powder River Basin assets. The Eagle Ford operations are located in Texas' DeWitt and Karnes counties. The Anadarko Basin development is located in western Oklahoma. It has a joint venture with Dow to develop a portion of its Anadarko Basin acreage.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Rising Oil Prices Drive Investment in Energy Stocks
- Oil Price Fluctuations: The conflict in Iran has driven oil prices from $57 per barrel at the start of the year to nearly $88, and while future trends remain uncertain, investors should consider the risks of high oil prices, especially since both Devon Energy and Diamondback Energy remain attractive even if prices drop back to $50.
- Diamondback Energy Strategy: The company focuses on low-cost production in the Permian Basin, optimizing capital allocation through increased drilling rig productivity and asset development, ensuring its base dividend of $4.20 per share is sustainable, with a current yield of 2.2%.
- Devon Energy Merger Opportunities: The merger with Coterra Energy will nearly double Devon's acreage in the Delaware Basin by adding 346,000 acres, resulting in the combined entity holding the largest share of inventory in the region with a break-even price below $40 per barrel, enhancing its competitive position.
- Investment Appeal: Both companies trade at low price-to-free cash flow multiples, and their combination of attractive valuations, low break-even prices, and potential for prolonged high oil prices makes them compelling buys for investors seeking energy exposure in the current market environment.
See More
Rising Oil Prices Drive Investment in Energy Stocks
- Oil Price Surge: Oil prices have surged from around $57 per barrel at the beginning of the year to nearly $88, creating opportunities for investors to protect their portfolios against high oil price environments despite the unpredictable future trajectory.
- Strategic Adjustments: Both Devon Energy and Diamondback Energy have adjusted their strategies to thrive in a downtrend that began in fall 2023, ensuring profitability at $50 oil, thus allowing for additional gains when prices rise.
- Merger Synergies: Devon's impending merger with Coterra Energy will nearly double its acreage in the Delaware Basin, resulting in a break-even price of less than $40 per barrel, significantly enhancing the company's competitive position in the market.
- Cash Flow and Valuation Advantage: Both companies trade at extremely low price-to-free cash flow multiples, and combined with favorable valuations and low break-even prices, they present compelling investment opportunities, especially in a scenario where oil prices may remain elevated for an extended period.
See More
Surge in Oil Prices and Upcoming Economic Data Release
- Oil Price Surge: Brent crude futures have risen 40% since the war began, while West Texas Intermediate has increased by 45%, which could have profound implications for the global economy, particularly amid rising inflationary pressures.
- Economic Data Release: The Personal Consumption Expenditures (PCE) price index is set to be released at 8:30 a.m. ET, with expectations of a 0.3% month-over-month increase and a 2.9% year-over-year rise, providing crucial inflation signals that will influence investor decisions.
- Food Stock Performance: Kroger's stock has gained 10% since the war started and is up about 20% in 2026, demonstrating the resilience and growth potential of food retailers in an uncertain market environment.
- Energy Company Highs: Several energy companies, including Marathon Petroleum and Phillips 66, have reached all-time highs, with increases of 16% and 13% respectively, reflecting strong market expectations for energy demand and a recovering investor confidence in the sector.
See More
US Stocks Plummet as Oil Prices Surge Amid Iran Conflict
- Oil Price Surge Impacts Markets: WTI crude oil prices soared over 9% on Thursday due to fears surrounding the Iran conflict, leading the S&P 500 to drop 1.52%, the Dow Jones by 1.56%, and the Nasdaq 100 by 1.73%, indicating heightened market anxiety over rising inflation.
- Bank Stocks Under Pressure: Morgan Stanley and Cliffwater LLC capped withdrawals from their private credit funds amid high investor redemption requests, causing Ares Management to fall over 6% and Goldman Sachs to drop more than 4%, reflecting growing concerns about credit quality in the market.
- Mixed Economic Data: Initial jobless claims in the US fell to 213,000, better than the expected 215,000, indicating labor market strength; however, January building permits fell 5.4% to 1.376 million, suggesting potential slowdowns in future construction activity, which could dampen market confidence.
- International Tensions Affecting Outlook: Comments from Iran's Supreme Leader heightened concerns about ongoing tensions in the Middle East, with expectations that if the situation remains tense, global oil supply could decrease by 8 million barrels per day, further driving up oil prices and potentially leading to a global economic slowdown.
See More
Petco and Dave & Busters See Active Options Trading
- Surge in Petco Options Trading: Petco Health & Wellness Co Inc (Ticker: WOOF) saw options trading volume reach 14,799 contracts today, representing approximately 1.5 million shares or about 69.9% of its average daily trading volume of 2.1 million shares over the past month, indicating a significant increase in market interest.
- High Demand for Call Options: Among WOOF's options, the $3.50 strike call option is particularly active, with 1,901 contracts traded today, equating to around 190,100 underlying shares, suggesting that investors are increasingly optimistic about future price increases.
- Dave & Busters Options Activity: Concurrently, Dave & Busters Entertainment Inc (Ticker: PLAY) recorded options trading volume of 7,604 contracts today, representing approximately 760,400 shares or about 69.2% of its average daily trading volume of 1.1 million shares over the past month, reflecting strong market activity.
- Put Options Trading Interest: For PLAY, the $13 strike put option has seen notable trading volume, with 2,028 contracts traded today, corresponding to approximately 202,800 underlying shares, indicating market concerns regarding potential declines in the stock price.
See More
IEA Releases Emergency Oil Reserves Amid Supply Shock
- Emergency Oil Release: The IEA member countries are releasing 400 million barrels of oil in response to the Strait of Hormuz supply shock, with the U.S. contributing 172 million barrels, which may increase household expenses as oil prices rally again.
- Market Reaction: Stock futures are lower this morning due to rising oil prices, reflecting market concerns about the ongoing Iran conflict, and until there is evidence of resolution, the risk of elevated oil prices remains.
- Layoffs and Investment: Atlassian announced a 10% workforce reduction, equating to about 1,600 employees, with the CEO stating this will help self-fund further investments in AI and enterprise sales, highlighting challenges in the traditional software model.
- Private Fund Restrictions: Morgan Stanley and Cliffwater have restricted withdrawals on private credit funds, with Morgan Stanley fulfilling less than half of an 11% redemption request on an $8 billion fund, indicating liquidity issues in the private credit market.
See More
Rising Oil Prices Drive Investment in Energy Stocks
- Oil Price Fluctuations: The conflict in Iran has driven oil prices from $57 per barrel at the start of the year to nearly $88, and while future trends remain uncertain, investors should consider the risks of high oil prices, especially since both Devon Energy and Diamondback Energy remain attractive even if prices drop back to $50.
- Diamondback Energy Strategy: The company focuses on low-cost production in the Permian Basin, optimizing capital allocation through increased drilling rig productivity and asset development, ensuring its base dividend of $4.20 per share is sustainable, with a current yield of 2.2%.
- Devon Energy Merger Opportunities: The merger with Coterra Energy will nearly double Devon's acreage in the Delaware Basin by adding 346,000 acres, resulting in the combined entity holding the largest share of inventory in the region with a break-even price below $40 per barrel, enhancing its competitive position.
- Investment Appeal: Both companies trade at low price-to-free cash flow multiples, and their combination of attractive valuations, low break-even prices, and potential for prolonged high oil prices makes them compelling buys for investors seeking energy exposure in the current market environment.
See More
Rising Oil Prices Drive Investment in Energy Stocks
- Oil Price Surge: Oil prices have surged from around $57 per barrel at the beginning of the year to nearly $88, creating opportunities for investors to protect their portfolios against high oil price environments despite the unpredictable future trajectory.
- Strategic Adjustments: Both Devon Energy and Diamondback Energy have adjusted their strategies to thrive in a downtrend that began in fall 2023, ensuring profitability at $50 oil, thus allowing for additional gains when prices rise.
- Merger Synergies: Devon's impending merger with Coterra Energy will nearly double its acreage in the Delaware Basin, resulting in a break-even price of less than $40 per barrel, significantly enhancing the company's competitive position in the market.
- Cash Flow and Valuation Advantage: Both companies trade at extremely low price-to-free cash flow multiples, and combined with favorable valuations and low break-even prices, they present compelling investment opportunities, especially in a scenario where oil prices may remain elevated for an extended period.
See More
Surge in Oil Prices and Upcoming Economic Data Release
- Oil Price Surge: Brent crude futures have risen 40% since the war began, while West Texas Intermediate has increased by 45%, which could have profound implications for the global economy, particularly amid rising inflationary pressures.
- Economic Data Release: The Personal Consumption Expenditures (PCE) price index is set to be released at 8:30 a.m. ET, with expectations of a 0.3% month-over-month increase and a 2.9% year-over-year rise, providing crucial inflation signals that will influence investor decisions.
- Food Stock Performance: Kroger's stock has gained 10% since the war started and is up about 20% in 2026, demonstrating the resilience and growth potential of food retailers in an uncertain market environment.
- Energy Company Highs: Several energy companies, including Marathon Petroleum and Phillips 66, have reached all-time highs, with increases of 16% and 13% respectively, reflecting strong market expectations for energy demand and a recovering investor confidence in the sector.
See More
US Stocks Plummet as Oil Prices Surge Amid Iran Conflict
- Oil Price Surge Impacts Markets: WTI crude oil prices soared over 9% on Thursday due to fears surrounding the Iran conflict, leading the S&P 500 to drop 1.52%, the Dow Jones by 1.56%, and the Nasdaq 100 by 1.73%, indicating heightened market anxiety over rising inflation.
- Bank Stocks Under Pressure: Morgan Stanley and Cliffwater LLC capped withdrawals from their private credit funds amid high investor redemption requests, causing Ares Management to fall over 6% and Goldman Sachs to drop more than 4%, reflecting growing concerns about credit quality in the market.
- Mixed Economic Data: Initial jobless claims in the US fell to 213,000, better than the expected 215,000, indicating labor market strength; however, January building permits fell 5.4% to 1.376 million, suggesting potential slowdowns in future construction activity, which could dampen market confidence.
- International Tensions Affecting Outlook: Comments from Iran's Supreme Leader heightened concerns about ongoing tensions in the Middle East, with expectations that if the situation remains tense, global oil supply could decrease by 8 million barrels per day, further driving up oil prices and potentially leading to a global economic slowdown.
See More
Petco and Dave & Busters See Active Options Trading
- Surge in Petco Options Trading: Petco Health & Wellness Co Inc (Ticker: WOOF) saw options trading volume reach 14,799 contracts today, representing approximately 1.5 million shares or about 69.9% of its average daily trading volume of 2.1 million shares over the past month, indicating a significant increase in market interest.
- High Demand for Call Options: Among WOOF's options, the $3.50 strike call option is particularly active, with 1,901 contracts traded today, equating to around 190,100 underlying shares, suggesting that investors are increasingly optimistic about future price increases.
- Dave & Busters Options Activity: Concurrently, Dave & Busters Entertainment Inc (Ticker: PLAY) recorded options trading volume of 7,604 contracts today, representing approximately 760,400 shares or about 69.2% of its average daily trading volume of 1.1 million shares over the past month, reflecting strong market activity.
- Put Options Trading Interest: For PLAY, the $13 strike put option has seen notable trading volume, with 2,028 contracts traded today, corresponding to approximately 202,800 underlying shares, indicating market concerns regarding potential declines in the stock price.
See More
IEA Releases Emergency Oil Reserves Amid Supply Shock
- Emergency Oil Release: The IEA member countries are releasing 400 million barrels of oil in response to the Strait of Hormuz supply shock, with the U.S. contributing 172 million barrels, which may increase household expenses as oil prices rally again.
- Market Reaction: Stock futures are lower this morning due to rising oil prices, reflecting market concerns about the ongoing Iran conflict, and until there is evidence of resolution, the risk of elevated oil prices remains.
- Layoffs and Investment: Atlassian announced a 10% workforce reduction, equating to about 1,600 employees, with the CEO stating this will help self-fund further investments in AI and enterprise sales, highlighting challenges in the traditional software model.
- Private Fund Restrictions: Morgan Stanley and Cliffwater have restricted withdrawals on private credit funds, with Morgan Stanley fulfilling less than half of an 11% redemption request on an $8 billion fund, indicating liquidity issues in the private credit market.
See More
