The oil market "could be oversupplied for longer than we previously anticipated,” Jefferies analysts say, while highlighting Chevron (NYSE:CVX), Occidental Petroleum (NYSE:OXY) and Marathon Oil (NYSE:MRO) are their energy sector favorites.
Q2 operating costs in the U.S. fell to $13/boe from $14.50 in 2014, and capital was ~$250M lower than Q1 and 25%-plus less than the same period last year.
Says higher production volumes, improved well performance in the Permian, and higher product prices resulted in a ~$400M Q/Q increase in operating cash flow before working capital.
OXY shares are "an attractive port amid the current oil volatility storm," Rezvan writes, believing the sustainable 4.6% yield - vs. other less stable, higher yielding energy equities - should provide a floor for the shares near the current level.