Oil prices edged lower last week on concerns about potentially weakening demand after Austria announced a nationwide lockdown to contain the spread of COVID-19. Therefore, we think it could be an opportune time for buying oil extraction stocks to cash in on the commodity’s rebound. We believe low-priced extraction stocks W&T Offshore (WTI) and VAALCO Energy (EGY) could be solid bets amid the dip in oil prices. Let’s discuss.Oil prices fell to a six-week low last week on concerns over demand with new COVID lockdowns being considered or implemented in some countries. After Austria announced a nationwide lockdown on November 19, crude oil fell into negative territory. The U.S benchmark for oil, West Texas Intermediate (WTI), even fell more than 4% last week, to a price not seen since October 7.
However, according to OPEC, oil demand should exceed pre-pandemic levels in 2022. Therefore, stocks bought during the dip in the oil prices could deliver rewards to investors when oil prices rebound.
So, we think it could be worth betting on extraction stocks W&T Offshore, Inc. (WTI) and VAALCO Energy, Inc. (EGY). These stocks are currently trading at less than $10 but possess solid rebound prospects.