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As Oil Prices Rally, is Enbridge a Good Pipeline Stock to Invest in?

Stock MarketsOct 12, 2021 11:02AM ET
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© Reuters. As Oil Prices Rally, is Enbridge a Good Pipeline Stock to Invest in?

Oil prices have hit their multi-year highs, fueled by a global supply crunch amid surging demand. And because oil prices are expected to continue moving higher, we think pipeline operators and oil-producing companies should garner big returns. However, considering Enbridge (NYSE:ENB)’s weak debt profile, is the stock a good choice now? Keep reading to find out.Canada-based Enbridge Inc. (ENB) is an energy infrastructure company with business platforms that include a network of crude oil, liquids, natural gas pipelines, regulated natural gas distribution utilities, and renewable power generation. The stock has delivered solid returns over the past year and year-to-date and is currently trading above its 50-day and 200-day moving averages.

The supercharged oil price rally shows no signs of slowing, with oil prices now reaching multi-year highs. U.S crude rose above $80 per barrel for the first time since late 2014, marking a 125% gain since the end of last October. And last week, OPEC and its allies announced that they are firm on their prior agreement to raise production by a modest 400,000 barrels per day in November, which may not be enough to meet the current demand surge.

The global supply crunch is expected to push the oil prices higher. Analysts expect this momentum to continue through the winter, and oil prices could hit the $100 per barrel mark. As a leading energy infrastructure company, ENB should benefit from the oil price rally.

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As Oil Prices Rally, is Enbridge a Good Pipeline Stock to Invest in?
 

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