Reuters is reporting that Saudi Oil Minister Ali al-Naimi wants OPEC to cut oil production as early as February. The Saudis want oil at $28 a barrel to cushion the loss of purchasing power caused by the dollar's drop against other currencies.
What lies ahead for the international oil stocks? One month ago, I wrote, "If OPEC is able to keep oil at its target price, the earnings downside at ExxonMobil
Investors who purchased Exxon a few years ago, properly anticipating fantastic earnings, look at today's $36.32 opening price and realize it is approximately $1 above the 2000 and 2001 lows -- and far from the mid- to upper-$40s highs.
The story is the same for BP
International oil companies trade at 12 to 15 times trailing earnings and are improving their balance sheets by reducing debt, buying their own stocks, and building up cash. For those looking for energy innovation outside of oil, consider BP and Shell. These companies are among the top five solar-cell manufacturers.
These companies are interesting at today's prices. Their potential total returns, including rich dividends, can meet or beat market averages with minimal risk.
W.D Crotty owns stock in ExxonMobil and follows commodities and alternative-energy companies. Join W.D. and other investors on the Oil and Gas discussion board. You can e-mail W.D. at [email protected] .