4 Beaten-Down Oil Stocks That Could Make Huge Moves if Crude Continues Its Momentum

Crude oil has quietly rebounded 20% off its most recent low, which means it's now technically in a bull market. That said, while this rally brought the U.S. oil benchmark, WTI, to around $52.50 a barrel, crude is still down about 3% for the year. That overall weakness has taken its toll on U.S.-focused oil stocks, many of which are down more than 20% this year. However, this group could bounce back sharply if crude continues its upward momentum, especially if it can claw its way back above $55 a barrel, since that's the tipping point for many of these companies. Here are four oil stocks that could surge if that happens.

WPX Energy (NYSE: WPX) has undergone a dramatic transformation over the last three years, completing $7 billion of transactions that have reshaped its portfolio and doubled oil output. Last quarter, for example, oil was up 27% thanks in part to robust results in the Permian Basin. Because of that, the company is on pace to increase oil production by 30% to 40% this year, with an aim to boost it another 35% to 45% next year. That said, the market's concern is that the company's leverage will remain elevated in the interim since it's still outspending cash flow at current prices, though it's working to get down to its target level by the end of next year. Given its rapidly increasing oil output, WPX stands to benefit from higher oil prices, so a further rise in crude could enable the company to hit its goals early, which should drive its stock higher.

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Source: Fool.com