Oil prices are rising today, heading for their highest close since April, as analysts continue to predict supply shortages. Coupled with hopes for summer demand, the decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to extend most of their oil production cuts prompted hedge funds to build up oil positions in June.
The energy sector saw heavy buying volume last month, climbing alongside Brent crude, according to Goldman Sachs. However, investors may want to hold off on at least two oil and gas stocks in July: Exxon Mobil Corp (NYSE:XOM) And Marathon Oil Corp (NYSE:MRO). In fact, both companies were on the list of the 25 worst S&P 500 Index (SPX) names to own this month, compiled by Rocky White, Senior Quantitative Analyst at Schaeffer.
XOM has closed July lower in nine of the last 10 years, losing an average of 1.8%. The security could be in the midst of a pattern of lower highs since hitting an all-time high of $123.75 on April 12, with familiar pressure now lingering around the $120 level that April and May ralliesEquity has increased 14.9% so far this year, but was last down 0.2% to $114.89.
In the meantime, Marathon Oil Stocks closed the month lower 60% of the time over the past decade, with an average decline of 3%. The security fell after reaching a 52-week high of $30.06 on April 12 and is now under pressure at $29. Year to date, MRO has risen more than 18% but was last seen down 0.1%, trading at $28.63.
