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West Texas Intermediate crude futures fell below the critical $70 level on July 19. Oil prices in the United States settled at $66.42 per barrel on the same day, hitting a 10-month low. The gradual easing of the supply curbs is expected to continue to put pressure on oil prices.
Oil prices are expected to decline further in the near term owing to decelerating global demand with the resurgence of COVID-19 cases in several countries. Given this backdrop, oil stocks Chevron Corporation (NYSE:CVX), Pioneer Natural Resources Company (NYSE:PXD), Phillips 66 (PSX), and Valero Energy Corporation (NYSE:VLO), which are currently trading at high valuations, might witness a pullback soon. Thus, we think these stocks are best avoided now.
