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Marathon Petroleum Corporation (MPC)
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Occidental Petroleum Corporation (OXY)
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Imperial Oil Limited (IMO)
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Tourmaline Oil Corp. (TOU)
I'm not sure how big of an impact a recession might have on the Sector given whats ahead with current lng development and the Sector being already depressed as it is, how much further down could it go if we do get the recession
It is true that if the economy turns into a recession, the oil and gas (O&G) industry may experience a downturn which may take time to recover. That being said, most O&G companies are generating record cash flows, with stronger balance sheets than ever compared to previous cycles. Most names in this industry may get worse before getting better, but where most oil companies are trading (OXY, TOU, IMO, MPC, etc.) is quite attractive, and could offer decent prospective returns three to five years from now.
Most investors don’t have the same headache as Mr. Buffet with multi-billion dollars of capital to be deployed. We think investors should invest when valuations are attractive, and just hold a minor cash position (depending on investors’ risk tolerance) to take advantage of the downturn.