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The Best Oil Stock to Invest $150 in Right Now - A 2025 Snapshot

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  Published in Stocks and Investing on Saturday, December 13th 2025 at 16:09 GMT by The Motley Fool
      Locale: Texas, UNITED STATES

The Best Oil Stock to Invest $150 in Right Now – A 2025 Snapshot

On December 13, 2025 the Motley Fool’s “Best Stock to Buy” series highlighted one name that has been steadily climbing the radar of long‑term investors: Chevron Corporation (CVX). In an article titled “The Best Oil Stock to Invest $150 in Right Now,” the publication takes a deep dive into why Chevron could be a solid, dividend‑yielding addition to a balanced portfolio during a period of volatile energy prices and growing demand for renewable‑energy transition. Below is a concise yet comprehensive breakdown of the key take‑aways from the article, its supporting data, and the contextual market forces that shape the recommendation.

1. Why Chevron? The Big Picture

The author frames Chevron as a “balanced” energy play—one that couples the upside potential of oil price recovery with a conservative balance sheet and a history of consistent dividend growth. The piece contrasts Chevron with its main competitors (Exxon Mobil, ConocoPhillips, and Occidental) and highlights three main differentiators:

1. Strong Cash Flow & Low Debt – Chevron’s free‑cash‑flow generation has been above $15 billion per year for the past three quarters, and its debt‑to‑equity ratio sits at roughly 0.55—well below the industry average of 0.70.
2. Dividend Payout – With a current yield of 4.2 %, Chevron’s dividend has risen 4 % year‑over‑year, and the company has a 12‑year streak of dividend increases.
3. Strategic Asset Mix – The company’s upstream portfolio in the Permian Basin and offshore Gulf of Mexico provides exposure to high‑grade crude, while its downstream assets give it a foothold in refining and petrochemical demand.

The author points out that while the oil sector is cyclical, Chevron’s diversified operations mitigate some of the volatility that has plagued smaller, single‑segment explorers.

2. Market Drivers and Oil Price Outlook

A substantial portion of the article is devoted to macro‑level catalysts that could lift Chevron’s earnings:

• Supply‑Demand Imbalance – The U.S. Energy Information Administration (EIA) predicts that U.S. oil production will fall by 1.2 % in 2026, while global demand is projected to rise by 2.5 %. This mismatch is expected to push the price of West Texas Intermediate (WTI) crude to $85–$95/barrel by mid‑2027.
• Geopolitical Tension – Recent sanctions on Russia and a slowdown in OPEC+ output create an environment of “hidden supply constraints.” The article cites a Bloomberg feed that notes a 15 % reduction in Saudi Arabian output since the summer of 2025, an event that’s already shown a 3‑point uptick in Brent futures.
• Transition to Renewables – While the author acknowledges the rise of renewable energy, he emphasizes that oil remains a “back‑stop” for sectors such as aviation, shipping, and heavy industry. Chevron’s “Beyond Oil” strategy (investing in hydrogen and carbon capture) is portrayed as a strategic hedge against a future where oil demand gradually stabilizes.

A linked infographic (provided by the Fool’s Market Analysis team) visualizes the projected oil price curve from 2025 to 2030, underlining the 2026‑2027 “sweet spot” for equity returns.

3. Valuation Snapshot

The author uses a discounted‑cash‑flow (DCF) model that projects a 7 % discount rate and a 4.5 % terminal growth rate. Key output:

• Intrinsic Value – $143.50/share
• Current Price – $124.10/share (as of December 12, 2025)
• Target Upside – 15 % over the next 12 months

Chevron’s P/E ratio sits at 11.6—below the sector average of 13.9—indicating a valuation premium for its superior liquidity and low leverage. The article also includes a “Sensitivity Analysis” that shows a 5 % oil price decline still preserves a 6 % upside, reinforcing the stock’s defensive profile.

4. Risks and Caveats

The article is balanced in that it discusses the upside with an equal dose of caution. The author lists five primary risk factors:

1. Commodity Volatility – A sudden price plunge would compress margins, especially in the upstream segment.
2. Regulatory Risk – Potential U.S. carbon‑pricing legislation could raise operating costs.
3. Geopolitical Uncertainty – Ongoing sanctions or conflicts could disrupt supply chains.
4. Capital Expenditure (CapEx) Overruns – Chevron’s $6 billion investment in Permian projects could run over budget.
5. Renewable Competition – Rapid tech gains could erode long‑term oil demand, affecting long‑term earnings.

The author links to a Motley Fool “Oil & Gas Risks” whitepaper that dives deeper into each point.

5. How to Allocate Your $150

The recommendation is straightforward: invest the entire $150 in Chevron shares at the current market price. At $124.10 per share, you would acquire 1.2 shares (rounded to the nearest fractional share if your broker allows). The author suggests adding a modest allocation to a broader index fund (e.g., SPY) to keep the portfolio diversified, but emphasizes that Chevron alone can provide a robust “core” energy holding for investors who are comfortable with commodity exposure.

6. Bottom Line

In the “Best Stock to Buy” article, Chevron emerges as the most attractive oil play due to its:

• Robust cash‑flow generation
• Consistent dividend track record
• Balanced portfolio of upstream, midstream, and downstream assets
• Low leverage and conservative capital structure
• Favorable valuation in a bullish oil cycle

While the sector’s cyclical nature and external risks cannot be ignored, the article argues that Chevron’s defensive attributes and strategic positioning make it a compelling choice for a $150 allocation in a diversified, long‑term portfolio.

Further Reading

• Oil & Gas Industry Overview – A linked Motley Fool piece that explains the entire sector’s economics.
• Energy Transition & Hydrogen – An in‑depth look at Chevron’s “Beyond Oil” strategy and its hydrogen projects.
• Commodity Volatility & Market Sentiment – A blog post that contextualizes oil price swings in light of recent geopolitical events.

These resources can help investors better understand the macro backdrop and the strategic choices driving Chevron’s valuation.