7 oil stocks to buy on the downside

Although soaring gasoline prices have been one of the low points of the year so far, the crippling rate of inflation has finally seeped into the demand profile of the energy sector. hydrocarbons, resulting in unusually low prices. Nevertheless, this favorable momentum for consumers may not last as long, thus inviting to take a look at oil stocks to buy on the downside.

Primarily, the travel sector has been one of the surprising sectors to thrive despite the pain of inflation. For example, the July 4 weekend brought airport traffic to a pandemic peak. And while recent data shows rising prices are finally hitting consumers in the wallet, a full normalization of the company could strengthen the case for which oil stocks to buy on the downside.

Second, investors should consider travel demand to Asia. Due to strict coronavirus mitigation policies, the Far East remains an unattractive proposition for international tourists. However, once the pandemic subsides or government agencies decide the economic pain is not worth the restrictions, demand for travel to the region will likely increase.

In such a scenario, you’ll want to focus on oil stocks like these seven stocks to buy on the downside.

Teleprinter	Company	Price
MUSA	United States	$284.36
XOM	Exxon	$96.93
SHEL	Shell	$53.38
NDV	Devon Energy	$62.85
MRO	Marathon oil	$24.80
OXY	western oil	$65.75
MTDR	Matador Resources	$57.78

Oil stocks to buy on the downside: Murphy USA (MUSA)

An operator of a retail gas station chainUnited States (NYSE:MUSA) is an integral part of the US energy infrastructure. Usually located near walmart (NYSE:WMT) stores, Murphy USA has the advantage of appealing to the most price-sensitive consumers. However, these details are relatively debatable when considering the necessity of the underlying product.

Unsurprisingly, MUSA stock has gained nearly 43% year-to-date (or year-to-date). However, it encountered some weakness in early June. Still, the current softness opens the door for MUSA as one of the oil stocks to buy on the downside.

Primarily, the trend in vehicle miles traveled indicates a positive direction for Murphy USA. While it may not replicate the exceptional growth numbers of the second quarter of 2022, the company is poised to post strong profitability due to the high crude oil baseline.

Exxon Mobil (XOM)

Diversified hydrocarbon energy giant Exxon Mobil (NYSE:XOM) has been on a rollercoaster ride throughout the new normal. Initially, the demand destruction caused by the Covid-19 crisis saw XOM stock plunge worryingly into the abyss. However, anticipation of a rally – followed by Russia’s invasion of Ukraine – saw stocks hit multi-year highs.

Today, a series of factors, including economic – many households are driving less to save money – and monetary – the US dollar is stronger against other currencies – have contributed to another headwind for commodities. tankers. In turn, over the past month, XOM has grown over 6%. However, this discount can be the signal for oil stocks to buy in the event of a decline.

With Exxon in particular, the company’s strong strengths in the balance sheet and in multiple measures of profitability make it attractive. Additionally, its diversified business should help XOM, especially as demand for natural gas soars amid an international heatwave.

Finally, Exxon released its second quarter results on Friday. And with shares up more than 4% on the day, it’s clear investors are pleased with the news.

Oil stocks to buy on the downside: Shell (SHEL)

While practically falling oil stocks to buy suffered from Russian military aggression in Ukraine, Shell (NYSE:SHEL) absorbed a direct impact. Following the invasion, Shell’s management team announced that it would leave the Sakhalin-2 project (located in Russia’s East Asian Corridor). However, the New York Times reported in early July that Russia had decided to seize the business, which also involves two large Japanese companies.

Naturally, over the past month, SHEL stock has found itself roughly flat. Additionally, growing concerns about a global recession spooked many investors about Shell. Still, the company could buy one of the declining oil stocks.

Mainly, Shell, despite its recent woes, is extremely relevant. In addition to its diversified oil and gas business, Shell aims to build Europe’s largest renewable energy hydrogen plant. So, with an eye to the future of energy, SHEL stock makes for an attractive long-term proposition.

Devon Energy (DVN)

As one of the largest independent oil and gas companies, Devon Energy (NYSE:NDV) is well placed to benefit from political overtones. With the national average price of gasoline still very high, many Americans continue to resent the exorbitant rate. In turn, many have called for increased domestic production, which of course runs counter to the Biden administration’s net-zero emissions goals.

Like a the wall street journal op-ed explained, oil companies like Devon fear that by disbursing the money for investments needed to ramp up infrastructure, President Biden and the Democrats could introduce anti-hydrocarbon-energy legislation as soon as the oil crisis hits. current will be over. Yet the fact is that the Democrats could lose the upcoming midterm elections, in part because of high oil prices.

With Republicans in charge, companies like Devon could thrive. Therefore, DVN is one of the oil stocks to buy on the downside.

Oil stocks to buy on the downside: Marathon Oil (MRO)

As another major player in the independent oil and gas sector, Marathon oil (NYSE:MRO) is also benefiting from renewed interest in domestic resource production. The reason investors are excited about MRO stocks is the popularity – or lack thereof – of President Biden.

According to a Morning Consult report, the net approval rating for the current POTUS is underwater in 44 states. Interestingly, “Biden is generally more popular among Democrats who identify as liberals than among Democrats who identify as moderates or conservatives.” But with generally politically moderate Americans, appealing to the extremes of the spectrum isn’t particularly helpful.

Therefore, a transition in power seems likely, both at the end of the midterms and in the 2024 presidential election. And with pro-hydrocarbon energy Republicans seemingly on the verge of taking control of the government, MRO could be one of the oil stocks to buy on a downside.

Western Oil (OXY)

Since the beginning of the year, western oil (NYSE:OXY) impressed investors with a gain of more than 125%. Of course, since the beginning of June, stocks are down more than 5%. Therefore, OXY may not be a sounding idea among oil stocks to buy on the downside. It’s still relevant.

Primarily, the company is a hydrocarbon exploration company, with projects in the United States, Canada, Chile and the United States. Additionally, Occidental has a very compelling middle portfolio, which is crucial for the stability of transportation infrastructure.

While the company may not have the greatest strengths on its balance sheet, it is a solidly profitable business. For example, Occidental’s net margin of 25.3% is well above the industry median of 3.4%. Additionally, the independent oil and gas company’s return on equity of 32.3% is higher than nearly 87% of its competitors.

Oil stocks to buy on decline: Matador Resources (MTDR)

With the unique dynamics of the post-COVID world pushing the energy sector higher, it’s hard to find oil stocks to buy on the downside that are deep in negative territory. Still, for those who want to bet on higher risk, higher reward ideas, Matador Resources (NYSE:MTDR) can be an interesting bet.

On June 7, MTDR closed at a price of $66.56. Since then, however, the shares have fallen around 14%, which is a significant relative discount. Additionally, inflationary pressures on the consumer economy as well as actions such as the release of crude oil from the strategic petroleum reserve have recently contributed to weak energy prices.

Yet once society normalizes – which may include a return to the office – demand could skyrocket again.

If so, the MTDR could rise more than other oil stocks to buy on the downside. Mainly, it has to do with its small capitalization. However, don’t assume that small cap necessarily means speculative. Matador shows many strengths in its financial statements, including very strong profitability measures.

As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.