Crude oil prices have rocketed 60% higher over the last year, and that’s suddenly making oil stocks must-have investments again.
Fortunately, we’ve got the best one you can buy right now…
On June 28, U.S. benchmark crude closed at $73.27, its highest price since 2014, as domestic oil supplies fell to their lowest levels of the year.
The drop, caused by rising international demand for American crude, has left American oil producers scrambling to catch up. Plus, it’s created a great profit play for our top oil stock to buy.
You see, oil’s aggressive jump pushed oil stocks to fresh highs over the last week. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSE Arca: XLE) rose a full 3% in just 48 hours on news that crude supplies had declined by 9.9 million barrels.
But oil exchange-traded funds are weighed down by bad and unprofitable companies.
Instead, we’ve identified an oil stock perfectly positioned to rake in profits as American oil producers rush to meet demand.
It’s an international engineering company with a perfect Money Morning VQScore™ of 4 and is poised to gain 76% as American production surges…
Global Conflict Is Pushing Oil Profits Through the Roof
Much of the recent flare in oil prices is the result of the Trump administration’s decision to withdraw from the Iran deal.
As part of the withdrawal, the United States vowed to reinforce previously waived sanctions on the Middle Eastern nation after Nov. 4, 2018.
Urgent: Oil prices could soar to $100 (or higher) ahead of largest IPO ever – click here to see how you could triple your money from oil’s epic rise.
When sanctions are put into force, Iranian oil production is expected to fall dramatically. In fact, U.S. officials are warning American allies that they should prepare for Iranian oil exports to fall flat by November.
According to an official at the U.S. Department of State, the administration has no intention of granting waivers to Iranian oil producers, and nations dependent on Iranian production “should be preparing now to go to zero.”
The looming threat of Iran’s potential exit from the oil market has driven the world’s largest suppliers to increase production. Russia announced that it would increase daily production by 1.5 million barrels in July, while OPEC signaled that it will also temporarily boost output to meet demand.
However, the United States is experiencing the largest increases in output and exports as the threat of a global shortage grows larger.
Earlier this month, U.S. oil exports reached a record 3 million barrels a day – more than is produced by 10 of OPEC’s 13 member nations.
Meanwhile, American production grew at a record pace, with the nation’s oil refineries hitting 10.9 million barrels a day for the first time ever in June. This is the highest level of production in the world aside from Russia, which produces 11 million barrels a day.
And it could just be the beginning.
According to Scott Sheffield, chairman of Pioneer Natural Resources Co. (NYSE: PXD), one of the nation’s largest shale producers, the United States could surpass 11 million barrels a day within the next four months.
While at the OPEC International Seminar in June, Sheffield told investors that U.S. production is likely to hit “13 million very quickly” and could jump to 15 million barrels a day within seven to eight years.
With oil production increasing at astonishing rates, oil companies will be fighting tooth and nail to access North America’s oil transportation infrastructure – the system necessary for getting oil to market.
The stock we’re bringing you today is a key player in the oil transportation industry. The company handles over 25% of oil and natural gas transportation in North America – a figure that’s certain to grow as oil production continues to increase.
Here’s our top oil stock to buy right now, and why we think it could soar 78%…
TransCanada Corporation Is Our Best Oil Stock to Buy Now
Based in Calgary, Alberta, Canada, the TransCanada Corp. (NYSE: TRP) is a major North American energy company that develops and maintains energy transportation infrastructure.
The company operates 57,000 miles of natural gas pipeline across North America and 3,000 miles of oil pipeline in Canada. Those pipelines are responsible for 20% of western Canada oil exports.
The company is known as the sole owner of the Keystone pipeline network. Since its completion in 2017, the Keystone vastly increased TransCanada’s ability to supply oil to large Gulf Coast refineries.
As North American oil production has increased, the company’s robust financial health has continued to improve. TransCanada earnings have grown by 33% over the last year while beating earnings in three of the last four quarters.
And these recent successes are just the beginning. The company is currently developing five natural gas pipelines in Mexico, where natural gas shipments are expected to double by 2020. These projects are expected to increase the company’s income by $540 million annually upon completion.
Additionally, TransCanada recently acquired the Columbia Pipeline Group for $13 billion. The acquisition adds nearly 15,000 miles of interstate natural gas pipeline that extends from New York to the Gulf of Mexico to their North American network.
TransCanada stock currently trades for $42.50. However, with North American oil and natural gas production and transportation volume continuing to increase, analysts see shares heading to a high of $76.00 – an increase of 78% over today’s price.
Plus, the company offers a strong 4.8% dividend – one of the best in the Canadian oil sector. In addition, the company intends to increase its dividend output by another 8% to 10% over the next two years.
Thanks to its high VQScore, TransCanada was an easy find. But not all winning stocks are this easy to find.
However, identifying winners like this is simple for the World’s Greatest Stock Picker.
His method has given readers the opportunity to lock in peak gains of 1,000% – repeatedly.
He hasn’t just gotten lucky during the historic bull market run either…
This champion stock picker first gave his readers the chance at fortunes during a huge market crash – Black Monday, August 2011, when the United States’ credit rating was downgraded for the first time in history.
About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.
Disclaimer: © 2018 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.