Three oil companies that investors should watch

With oil prices surging more than 26% from January this year, the big question looming is whether investors have missed the boat on a golden buying opportunity or if there is still time to buy Australian oil companies that are primed for growth.

Well, you will be relieved to learn that there are still some great opportunities, and I've got my eye on three ASX-listed oil companies that fit the category.

First up is Woodside Energy. Despite the company's share price falling since 2022, rising oil prices benefit Woodside because it can increase profits by selling the oil and gas it produces at higher prices.

If the company can also keep production costs steady, the potential higher earnings will inevitably be a positive sign for the share price moving forward. From a technical standpoint, Woodside's share price seems to have found support at $28, so keep an eye on this as it's a very good company.

Next up is one of the biggest stocks on our market, BHP. Like Woodside, it also benefits from higher oil prices because it can increase its revenues from selling its petroleum assets. BHP's share price has been trading mostly sideways for the past three years, and it recently tested a previous support level at $42.

If the share price can start to rise in a sustained move, I expect a re-test of the $50 level over the coming months and a move higher over the longer term.

Last but not least is Viva Energy. Viva is different from the other two stocks in that it refines oil into products such as gasoline and diesel. Nevertheless, higher oil prices could increase their profit margin, although it could also increase the cost of production.

The share price has been rising nicely, increasing over 200% since March 2020. That said, the stock has started to fall recently, and while I'm not concerned about this, I will be watching it very closely. There is support around $3.40 and if this level holds, which I suspect it will, it will provide the next buying opportunity.

What are the best and worst-performing sectors this week?

The best-performing sectors include Materials, up more than 3%, followed by Utilities and Industrials, up more than one%. The worst-performing sectors include Real Estate, down more than 1%, followed by Financials and Energy down more than half of a per cent.

The best-performing stocks in the ASX top 100 include Ansell, up more than 11%, followed by Whitehaven Coal, up more than 10% and Computershare, up more than seven%. The worst-performing stocks include Bank of Queensland and Ampol, down more than five%, followed by Sonic Healthcare, down more than four%.

What's next for the Australian stock market?

Buyers have dominated this week, with the All-ordinaries index rising more than 1%. What I find interesting is that since January of this year, sellers have attempted to push prices down on a weekly basis four times.

However, each time, buyers have swiftly countered, erasing the sellers' efforts and propelling prices to new highs within a week or two. Given the recent pattern, I see no sign of things changing in the next week or so.

As such, I anticipate that buyers will push the index to a new all-time high before the end of April.

That said, as mentioned in previous reports, I see potential short-term resistance to the upwards move around the 8200 to 8400 level. I will add that if the market rises very strongly, which is possible as April is historically a volatile month, then it might blow through 8,400. If that occurs, there is potential resistance at the 8600 level.

Turning to the sectors, we have seen Energy and Materials perform very well over the past couple of weeks, and my enthusiasm for these two sectors remains strong in the short to medium term.

However, another sector benefiting from their growth is the Utilities sector, which is looking really good from a technical perspective at the moment. If prices continue to climb, the Utilities sector may make new all-time highs before the year concludes. Therefore, now is a prime opportunity to start looking at stocks in this sector to uncover potential trading opportunities.

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