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Yahoo
07-05-2025
- Business
- Yahoo
Is EOG Resources (EOG) Among the Top Commodity Producers With the Highest Upside Potential?
On the other hand, Morgan Stanley, on February 21, highlighted that 2025 is anticipated to be a crucial year for commodity markets, influenced by supply fundamentals, inflation patterns, and dollar fluctuations. Inflation in the United States is still high, falling short of the Federal Reserve's 2% target in December with headline CPI readings of 2.9% and core CPI readings of 3.2%. After the U.S. presidential election, policy changes—particularly related to immigration, deficits, and tariffs—have raised inflation expectations. According to data from the University of Michigan, they rose from 2.8% to 3.3% in just one month. Commodity prices have generally been supported by these conditions. 'Commodity prices have whipsawed throughout the 2020s—plummeting with arrival of the COVID-19 pandemic, then surging to record highs after Russia's invasion of Ukraine, and then sinking again,' said Ayhan Kose, the World Bank Group's Deputy Chief Economist and Director of the Prospects Group. 'In an era of geopolitical tensions, surging demand for critical minerals, and more frequent natural disasters, that could become the new normal. Successfully navigating through repeated commodity prices swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates to facilitate job creation.' However, the World Bank's April 2025 Commodity Markets Outlook projects that global commodity prices will plummet, falling 12% in 2025 and further 5% in 2026 to their lowest level since 2020. The anticipated drop is being driven by slowing global economic growth and persistently high oil supply. This decline carries risks to economic growth in developing countries, with two-thirds likely to see setbacks, even though it may reduce short-term price pressures associated with rising trade barriers. Notwithstanding the drop, nominal prices will still be higher than they were before the pandemic. The commodity market is booming. According to a research report, the size of the global commodity services market was projected at $3.56 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 8.65% from 2025 to 2034, from $3.87 billion in 2025 to roughly $8.16 billion by 2034. Regionally, the commodity services industry is dominated by North America, while Asia Pacific is projected to grow at a quick pace. Commodity producer stocks are shares of publicly listed firms that produce, explore, or distribute commodities. These businesses are frequently interested in metals, mining, agriculture, and energy. Commodity producer stocks are chosen by investors to obtain exposure to both the equity and commodities markets, potentially profiting from heightened interest in either. We recently compiled a list of the Top 15 Commodity Producers With the Highest Upside Potential . In this article, we are going to take a look at where EOG Resources, Inc. (NYSE:EOG) stands against the other commodity producer stocks. Story Continues Since late September, the U.S. dollar has risen by almost 8%, in part because of growing interest rates and policy expectations. Global demand for commodities is usually pressured by a strong dollar, but if the currency stabilizes or depreciates, it may eliminate a significant obstacle. Although recent contango suggests sufficient short-term supply, a yield-adjusted perspective reveals markets in backwardation at about 4%, showing ongoing physical tightness. This suggests that inventories for essential commodities remain low, making the market more susceptible to demand shocks. Commodity performance in 2025 is supported by tight supply, high inflation, as well as potential dollar weakness. Top 15 Commodity Producers With the Highest Upside Potential An oil rig in action in a vast desert, drilling for natural gas. Our Methodology To collect data for this article, we examined companies operating in the commodity sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of May 1, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Commodity Producers with the Highest Upside Potential. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). EOG Resources, Inc. (NYSE:EOG) Analysts' Upside Potential as of May 01: 27.15% EOG Resources, Inc. (NYSE:EOG) is an oil and gas company that owns land in several US shale plays, mostly in the Eagle Ford and Permian Basin. The firm stated that it had 4.7 billion barrels of oil equivalent in net proven reserves by the end of 2024. At a ratio of 69% oil and natural gas liquids to 31% natural gas, net production averaged about 1,062 thousand barrels of oil equivalent per day in 2024. It is ranked eleventh on our list of the Best Commodity Stocks. EOG Resources, Inc. (NYSE:EOG)'s approach to capital allocation is a little different from that of other US exploration and production companies. Although the integrated majors and their peers have been bitten by the consolidation bug, the firm mostly concentrates on organic exploration activities. It has adopted a capital allocation strategy that prioritizes paying shareholders back while still being open to investing in modest production expansion. Ultimately, it changed course earlier than most to become a low-cost provider in a market that overextended itself during the shale revolution. It is positioned as an outstanding shale company with industry-leading returns on capital due to its impressive asset mix, which includes its dominant position in the Delaware Basin. EOG Resources, Inc. (NYSE:EOG) reported cash operating expenses of $10.31 boe/d and total production of 1,090 mboe/d. Furthermore, the company utilized about $800 million to repurchase shares in the first quarter of 2025, returning 98% of its available free cash flow. In 2025, management reduced capital spending by $200 million to $6 billion. Overall, EOG ranks 11th on our list of the Top Commodity Producers With the Highest Upside Potential. While we acknowledge the potential of EOG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than EOG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
06-05-2025
- Business
- Yahoo
Is Devon Energy Corporation (DVN) Among the Top Commodity Producers With the Highest Upside Potential?
On the other hand, Morgan Stanley, on February 21, highlighted that 2025 is anticipated to be a crucial year for commodity markets, influenced by supply fundamentals, inflation patterns, and dollar fluctuations. Inflation in the United States is still high, falling short of the Federal Reserve's 2% target in December with headline CPI readings of 2.9% and core CPI readings of 3.2%. After the U.S. presidential election, policy changes—particularly related to immigration, deficits, and tariffs—have raised inflation expectations. According to data from the University of Michigan, they rose from 2.8% to 3.3% in just one month. Commodity prices have generally been supported by these conditions. 'Commodity prices have whipsawed throughout the 2020s—plummeting with arrival of the COVID-19 pandemic, then surging to record highs after Russia's invasion of Ukraine, and then sinking again,' said Ayhan Kose, the World Bank Group's Deputy Chief Economist and Director of the Prospects Group. 'In an era of geopolitical tensions, surging demand for critical minerals, and more frequent natural disasters, that could become the new normal. Successfully navigating through repeated commodity prices swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates to facilitate job creation.' However, the World Bank's April 2025 Commodity Markets Outlook projects that global commodity prices will plummet, falling 12% in 2025 and further 5% in 2026 to their lowest level since 2020. The anticipated drop is being driven by slowing global economic growth and persistently high oil supply. This decline carries risks to economic growth in developing countries, with two-thirds likely to see setbacks, even though it may reduce short-term price pressures associated with rising trade barriers. Notwithstanding the drop, nominal prices will still be higher than they were before the pandemic. The commodity market is booming. According to a research report, the size of the global commodity services market was projected at $3.56 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 8.65% from 2025 to 2034, from $3.87 billion in 2025 to roughly $8.16 billion by 2034. Regionally, the commodity services industry is dominated by North America, while Asia Pacific is projected to grow at a quick pace. Commodity producer stocks are shares of publicly listed firms that produce, explore, or distribute commodities. These businesses are frequently interested in metals, mining, agriculture, and energy. Commodity producer stocks are chosen by investors to obtain exposure to both the equity and commodities markets, potentially profiting from heightened interest in either. We recently compiled a list of the Top 15 Commodity Producers With the Highest Upside Potential . In this article, we are going to take a look at where Devon Energy Corporation (NYSE:DVN) stands against the other Commodity Producer stocks. Story Continues Since late September, the U.S. dollar has risen by almost 8%, in part because of growing interest rates and policy expectations. Global demand for commodities is usually pressured by a strong dollar, but if the currency stabilizes or depreciates, it may eliminate a significant obstacle. Although recent contango suggests sufficient short-term supply, a yield-adjusted perspective reveals markets in backwardation at about 4%, showing ongoing physical tightness. This suggests that inventories for essential commodities remain low, making the market more susceptible to demand shocks. Commodity performance in 2025 is supported by tight supply, high inflation, as well as potential dollar weakness. Top 15 Commodity Producers With the Highest Upside Potential A group of technicians in hazmat suits inspecting a natural gas storage tank. Our Methodology To collect data for this article, we examined companies operating in the commodity sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of May 1, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Commodity Producers with the Highest Upside Potential. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). Devon Energy Corporation (NYSE:DVN) Analysts' Upside Potential as of May 01: 40.37% Devon Energy Corporation (NYSE:DVN) is an oil and gas company that owns land in a number of the best shale plays in the United States. Although the Permian Basin accounts for around two-thirds of its production, the Anadarko, Eagle Ford, and Bakken basins each produce a significant amount of it. The firm's net proved reserves were 2.2 billion barrels of oil equivalent as of the end of 2024. In 2024, net production averaged around 848,000 barrels of oil equivalent per day, with 73% oil and gas liquids and 27% natural gas. It is among the Best Commodity Stocks. In Q4 2024, Devon Energy Corporation (NYSE:DVN) exceeded projections with an adjusted EPS of $1.16, which was more than the $1 estimate. The company's revenue also surpassed projections by $155.3 million, rising 6.22% year over year to $4.4 billion. The Williston Basin business, which the oil and gas company purchased from Grayson Mill Energy in a $5 billion agreement, saw its output soar 28% YoY to 848,000 boe/d during the quarter, which was the main driver of the strong performance. Devon Energy Corporation (NYSE:DVN) generated $3 billion in free cash flow in 2024 and maintains a solid balance sheet despite the acquisition. The company just increased its quarterly dividend by 9.1% to $0.24 per share and gave $2 billion back to its shareholders. By 2025, DVN expects to generate free cash flow at current strip pricing and pay out up to 70% of the cash return to shareholders. Overall, DVN ranks 4th on our list of the Top Commodity Producers With the Highest Upside Potential. While we acknowledge the potential of DVN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DVN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
06-05-2025
- Business
- Yahoo
Is ConocoPhillips (COP) Among the Top Commodity Producers With the Highest Upside Potential?
On the other hand, Morgan Stanley, on February 21, highlighted that 2025 is anticipated to be a crucial year for commodity markets, influenced by supply fundamentals, inflation patterns, and dollar fluctuations. Inflation in the United States is still high, falling short of the Federal Reserve's 2% target in December with headline CPI readings of 2.9% and core CPI readings of 3.2%. After the U.S. presidential election, policy changes—particularly related to immigration, deficits, and tariffs—have raised inflation expectations. According to data from the University of Michigan, they rose from 2.8% to 3.3% in just one month. Commodity prices have generally been supported by these conditions. 'Commodity prices have whipsawed throughout the 2020s—plummeting with arrival of the COVID-19 pandemic, then surging to record highs after Russia's invasion of Ukraine, and then sinking again,' said Ayhan Kose, the World Bank Group's Deputy Chief Economist and Director of the Prospects Group. 'In an era of geopolitical tensions, surging demand for critical minerals, and more frequent natural disasters, that could become the new normal. Successfully navigating through repeated commodity prices swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates to facilitate job creation.' However, the World Bank's April 2025 Commodity Markets Outlook projects that global commodity prices will plummet, falling 12% in 2025 and further 5% in 2026 to their lowest level since 2020. The anticipated drop is being driven by slowing global economic growth and persistently high oil supply. This decline carries risks to economic growth in developing countries, with two-thirds likely to see setbacks, even though it may reduce short-term price pressures associated with rising trade barriers. Notwithstanding the drop, nominal prices will still be higher than they were before the pandemic. The commodity market is booming. According to a research report, the size of the global commodity services market was projected at $3.56 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 8.65% from 2025 to 2034, from $3.87 billion in 2025 to roughly $8.16 billion by 2034. Regionally, the commodity services industry is dominated by North America, while Asia Pacific is projected to grow at a quick pace. Commodity producer stocks are shares of publicly listed firms that produce, explore, or distribute commodities. These businesses are frequently interested in metals, mining, agriculture, and energy. Commodity producer stocks are chosen by investors to obtain exposure to both the equity and commodities markets, potentially profiting from heightened interest in either. We recently compiled a list of the Top 15 Commodity Producers With the Highest Upside Potential . In this article, we are going to take a look at where ConocoPhillips (NYSE:COP) stands against the other Commodity Producer stocks. Story Continues Since late September, the U.S. dollar has risen by almost 8%, in part because of growing interest rates and policy expectations. Global demand for commodities is usually pressured by a strong dollar, but if the currency stabilizes or depreciates, it may eliminate a significant obstacle. Although recent contango suggests sufficient short-term supply, a yield-adjusted perspective reveals markets in backwardation at about 4%, showing ongoing physical tightness. This suggests that inventories for essential commodities remain low, making the market more susceptible to demand shocks. Commodity performance in 2025 is supported by tight supply, high inflation, as well as potential dollar weakness. ConocoPhillips (COP): Among Billionaire Israel Englander's Stock Picks with Huge Upside Potential An underground network of pipelines transporting oil through an expansive terrain. Our Methodology To collect data for this article, we examined companies operating in the commodity sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of May 1, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Commodity Producers with the Highest Upside Potential. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). ConocoPhillips (NYSE:COP) Analysts' Upside Potential as of May 01: 37.28% One of the largest independent exploration and production firms in the world by output and reserves, ConocoPhillips (NYSE:COP), generated 3.1 billion cubic feet of natural gas per day and 1.2 million barrels of oil and natural gas liquids per day in 2023, mostly from Alaska and the Lower 48 in the United States, Norway in Europe, and several countries in Asia-Pacific and the Middle East. At the end of 2023, proven reserves amounted to 6.8 billion barrels of oil equivalent. It had a strong fourth quarter of 2024. The business reported $14.74 billion in revenue, almost $515 million more than anticipated. It exceeded forecasts by $0.15, with adjusted earnings per share of $1.98. ConocoPhillips (NYSE:COP)'s $22.5 billion purchase of Marathon in November 2024, which expanded its resource base by more than 2 billion barrels of oil and gas with an average supply cost of less than $30 per barrel, was a major highlight of the quarter. The company's output surged 14.8% year over year after this acquisition, hitting 2.183 million barrels of oil equivalent per day in the quarter. ConocoPhillips (NYSE:COP) has a strong financial base, making it an attractive option for income investors. The company recorded $20.3 billion in total cash from operations over the previous year, including $20.1 billion in operating cash flow. It continued to distribute $3.6 billion in dividends, showing its dedication to shareholder returns. For the ninth consecutive year, the business increased its quarterly dividend by 34% to $0.78 per share in October. Overall, COP ranks 5th on our list of the Top Commodity Producers With the Highest Upside Potential. While we acknowledge the potential of COP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than COP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
05-05-2025
- Business
- Yahoo
Chevron Corporation (CVX): Among the Top Commodity Producers With the Highest Upside Potential
We recently compiled a list of the Top 15 Commodity Producers With the Highest Upside Potential. In this article, we are going to take a look at where Chevron Corporation (NYSE:CVX) stands against the other Commodity Producer stocks. Commodity producer stocks are shares of publicly listed firms that produce, explore, or distribute commodities. These businesses are frequently interested in metals, mining, agriculture, and energy. Commodity producer stocks are chosen by investors to obtain exposure to both the equity and commodities markets, potentially profiting from heightened interest in either. The commodity market is booming. According to a research report, the size of the global commodity services market was projected at $3.56 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 8.65% from 2025 to 2034, from $3.87 billion in 2025 to roughly $8.16 billion by 2034. Regionally, the commodity services industry is dominated by North America, while Asia Pacific is projected to grow at a quick pace. However, the World Bank's April 2025 Commodity Markets Outlook projects that global commodity prices will plummet, falling 12% in 2025 and further 5% in 2026 to their lowest level since 2020. The anticipated drop is being driven by slowing global economic growth and persistently high oil supply. This decline carries risks to economic growth in developing countries, with two-thirds likely to see setbacks, even though it may reduce short-term price pressures associated with rising trade barriers. Notwithstanding the drop, nominal prices will still be higher than they were before the pandemic. Ayhan Kose, the World Bank Group's Deputy Chief Economist and Director of the Prospects Group, stated: 'Commodity prices have whipsawed throughout the 2020s—plummeting with arrival of the COVID-19 pandemic, then surging to record highs after Russia's invasion of Ukraine, and then sinking again,' said Ayhan Kose, the World Bank Group's Deputy Chief Economist and Director of the Prospects Group. 'In an era of geopolitical tensions, surging demand for critical minerals, and more frequent natural disasters, that could become the new normal. Successfully navigating through repeated commodity prices swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates to facilitate job creation.' On the other hand, Morgan Stanley, on February 21, highlighted that 2025 is anticipated to be a crucial year for commodity markets, influenced by supply fundamentals, inflation patterns, and dollar fluctuations. Inflation in the United States is still high, falling short of the Federal Reserve's 2% target in December with headline CPI readings of 2.9% and core CPI readings of 3.2%. After the U.S. presidential election, policy changes—particularly related to immigration, deficits, and tariffs—have raised inflation expectations. According to data from the University of Michigan, they rose from 2.8% to 3.3% in just one month. Commodity prices have generally been supported by these conditions. Since late September, the U.S. dollar has risen by almost 8%, in part because of growing interest rates and policy expectations. Global demand for commodities is usually pressured by a strong dollar, but if the currency stabilizes or depreciates, it may eliminate a significant obstacle. Although recent contango suggests sufficient short-term supply, a yield-adjusted perspective reveals markets in backwardation at about 4%, showing ongoing physical tightness. This suggests that inventories for essential commodities remain low, making the market more susceptible to demand shocks. Commodity performance in 2025 is supported by tight supply, high inflation, as well as potential dollar weakness. A tanker truck making its way through a refinery facility. . To collect data for this article, we examined companies operating in the commodity sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of May 1, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Commodity Producers with the Highest Upside Potential. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). Analysts' Upside Potential as of May 01: 22.45% Chevron Corporation (NYSE:CVX) is a global energy business that engages in exploration, production, and refining. It produces 3.0 million barrels of oil equivalent per day, which includes 7.7 million cubic feet of natural gas per day and 1.7 million barrels of liquids per day, making it the second-largest oil business in the United States. Production occurs throughout North America, South America, Europe, Africa, Asia, and Australia. It can refine 1.8 million barrels of oil per day at its refineries in the US and Asia. At the end of 2024, proven reserves were 9.8 billion barrels of oil equivalent, which included 28.4 trillion cubic feet of natural gas and 5.1 billion barrels of liquids. As per Morningstar analysts, its oil-leveraged portfolio's volume growth and margin expansion, cost savings, and improved operations are anticipated to generate higher returns and more free cash flow. Chevron Corporation (NYSE:CVX) reported strong fourth-quarter results for 2024, exceeding analyst projections by more than $3.8 billion and reporting sales of $52.23 billion, a 10.7% rise over the same quarter the year before. A 19% increase in US production and a 7% increase in global output, both of which established new records for the year, were major contributors to this expansion. The firm maintained a strong financial position with a year-end net debt ratio of only 10%, and it also generated close to $8 billion from asset sales. Over time, Chevron Corporation (NYSE:CVX)'s dividend strategy has been strengthened by its consistent cash reserves. The business recorded operating cash flow of $31.5 billion and free cash flow of $15 billion for the fiscal year 2024. Its sustained dedication to shareholder returns is shown by the $12 billion in dividends it paid to shareholders and the $15 billion it repurchased in stock as a result of this strong cash flow. Overall, CVX ranks 14th on our list of the Top Commodity Producers With the Highest Upside Potential. While we acknowledge the potential of CVX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CVX but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
05-05-2025
- Business
- Yahoo
Is Occidental Petroleum Corporation (OXY) Among the Top Commodity Producers With the Highest Upside Potential?
We recently compiled a list of the Top 15 Commodity Producers With the Highest Upside Potential. In this article, we are going to take a look at where Occidental Petroleum Corporation (NYSE:OXY) stands against the other Commodity Producer stocks. Commodity producer stocks are shares of publicly listed firms that produce, explore, or distribute commodities. These businesses are frequently interested in metals, mining, agriculture, and energy. Commodity producer stocks are chosen by investors to obtain exposure to both the equity and commodities markets, potentially profiting from heightened interest in either. The commodity market is booming. According to a research report, the size of the global commodity services market was projected at $3.56 billion in 2024 and is anticipated to grow at a compound annual growth rate (CAGR) of 8.65% from 2025 to 2034, from $3.87 billion in 2025 to roughly $8.16 billion by 2034. Regionally, the commodity services industry is dominated by North America, while Asia Pacific is projected to grow at a quick pace. However, the World Bank's April 2025 Commodity Markets Outlook projects that global commodity prices will plummet, falling 12% in 2025 and further 5% in 2026 to their lowest level since 2020. The anticipated drop is being driven by slowing global economic growth and persistently high oil supply. This decline carries risks to economic growth in developing countries, with two-thirds likely to see setbacks, even though it may reduce short-term price pressures associated with rising trade barriers. Notwithstanding the drop, nominal prices will still be higher than they were before the pandemic. Ayhan Kose, the World Bank Group's Deputy Chief Economist and Director of the Prospects Group, stated: 'Commodity prices have whipsawed throughout the 2020s—plummeting with arrival of the COVID-19 pandemic, then surging to record highs after Russia's invasion of Ukraine, and then sinking again,' said Ayhan Kose, the World Bank Group's Deputy Chief Economist and Director of the Prospects Group. 'In an era of geopolitical tensions, surging demand for critical minerals, and more frequent natural disasters, that could become the new normal. Successfully navigating through repeated commodity prices swings will require developing economies to build fiscal space, strengthen their institutions, and improve investment climates to facilitate job creation.' On the other hand, Morgan Stanley, on February 21, highlighted that 2025 is anticipated to be a crucial year for commodity markets, influenced by supply fundamentals, inflation patterns, and dollar fluctuations. Inflation in the United States is still high, falling short of the Federal Reserve's 2% target in December with headline CPI readings of 2.9% and core CPI readings of 3.2%. After the U.S. presidential election, policy changes—particularly related to immigration, deficits, and tariffs—have raised inflation expectations. According to data from the University of Michigan, they rose from 2.8% to 3.3% in just one month. Commodity prices have generally been supported by these conditions. Since late September, the U.S. dollar has risen by almost 8%, in part because of growing interest rates and policy expectations. Global demand for commodities is usually pressured by a strong dollar, but if the currency stabilizes or depreciates, it may eliminate a significant obstacle. Although recent contango suggests sufficient short-term supply, a yield-adjusted perspective reveals markets in backwardation at about 4%, showing ongoing physical tightness. This suggests that inventories for essential commodities remain low, making the market more susceptible to demand shocks. Commodity performance in 2025 is supported by tight supply, high inflation, as well as potential dollar weakness. Oil derricks in the background with a few workers in the foreground, emphasizing the company's oil and gas production activities. To collect data for this article, we examined companies operating in the commodity sector and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of May 1, 2025. To keep our list relevant, we have only included companies with a market cap of $10 billion and above. The following are the Commodity Producers with the Highest Upside Potential. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here). Analysts' Upside Potential as of May 01: 29.28% Occidental Petroleum Corporation (NYSE:OXY) is one of the world's leading independent oil and gas producers. Its upstream operations are dispersed throughout North Africa, the Middle East, and the US. The firm owns a majority equity stake in Western Midstream and operates a consolidated midstream business that supplies the upstream segment with gathering, processing, and transportation services. The portfolio also consists of a chemicals company that makes PVC and caustic soda. The latter segment benefits from low energy and ethylene prices, but its profitability is governed by the strength of the overall economy. Despite having dropped over 40% from its peak, Occidental Petroleum Corporation (NYSE:OXY) is still a strong investment opportunity due to its affordable price and advantageous supply dynamics. The lower-than-average U.S. oil supply at the moment may eventually catalyze rising oil prices, which would be advantageous to the company. When compared to competitors like ExxonMobil, Chevron, and BP, the business seems to be reasonably valued from a valuation perspective, particularly when looking at PEG and PE indicators. The business stands to benefit from operational leverage as well as a possible market re-rating as energy markets normalize and supply limitations persist. The firm's combination of industry tailwinds and enticing valuation metrics places it as a remarkable fallen angel with a positive risk/reward profile for investors looking for value in the energy sector. According to Occidental Petroleum Corporation (NYSE:OXY), production in the Permian Basin is expected to rise by more than 15% by 2025. This is due to a modest increase across legacy positions and a full year of CrownRock contributions. It is anticipated that CrownRock assets alone will average more than 170,000 BOE per day, which is more than 5% growth. The company's US onshore portfolio accounts for more than 75% of its oil and gas capital, with the Permian receiving a sizable share of this allocation. Overall, OXY ranks 10th on our list of the Top Commodity Producers With the Highest Upside Potential. While we acknowledge the potential of OXY as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than OXY but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
