Three High Flying Oil And Gas Stocks

Brent and WTI crude oil contracts traded to 9-month highs last week, underpinned by growing optimism about 2021 economic strength. North American oil and gas stocks gained ground as well, but most sector equities are still underperforming the contracts by a country mile. Even so, a handful of mavericks are leading the sector, close to 52-week or all-time highs even though futures are situated well below their 2018 rally highs.

Let’s look at three high-flying oil and gas stocks trading on U.S. exchanges. These are issues to watch in coming months because market leaders tend to outperform for long stretches in recovering markets since they’ve already proven their resiliency in tough times. And 2020 has certainly been a downer for the majority of oil and gas plays, with the highly-liquid SPDR Select Sector Energy ETF (XLE) posting a negative 36% year-to-date return.

Goodrich Petroleum

Goodrich Petroleum Corp. (GDP) explores, develops, and produces energy products in Louisiana, Texas, and Mississippi and has posted a decent 12% return so far in 2020.  The stock hit an all-time low at 2.39 in the first quarter and turned sharply higher, reaching 200-day moving average resistance in April. It completed a breakout above that barrier in October, surged into the green for the year, and could lift into the mid-teens in coming months.

Renewable Energy Group

Renewable Energy Group Inc. (REGI) produces and distributes advanced biofuels, utilizing corn, inedible animal fats, and used cooking oils. This outstanding performer has posted an impressive 121% return so far in 2020. The stock fell to a 2-year low in 2019 and turned sharply higher, completing a breakout above 2018 resistance in the low 30s in August. It’s almost doubled in price since that time and should continue to prosper under a climate-conscious Biden administration.

Liberty Oilfield Services

Liberty Oilfield Services Inc. (LBRT) provides hydraulic fracturing services for onshore oil and natural gas exploration and is trading close to breakeven for 2020. The stock fell to a two-year low in single digits in the first quarter and turned sharply higher into June, stalling at 200-day moving average resistance. The stock has just completed a breakout above that formidable barrier, setting the stage for potentially strong 2021 upside.

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Disclosure: the author held no positions in aforementioned securities at the time of publication.