ENERGY STOCKS - Storming Back
Kiplinger's Personal Finance|January 2022
A combination of tight supplies, rising demand and continued economic growth is fueling the energy sector.
ADAM SHELL

IT’S NO SECRET THAT MUCH OF WALL Street is adopting a green-is-good investing mentality to combat climate change. But that doesn’t mean less environmentally friendly, old-style oil and gas stocks can’t speed ahead from time to time. That’s just what has happened in recent months.

Thanks to supply shortages and a rise in demand for fossil fuels as the economy recovers, large-company energy stocks have gained 60% since the start of 2021. That’s more than double the 27% rise in the S&P 500 and tops all other market sectors. And it comes after a disastrous 2020, when energy stocks plunged 34%— the sector’s worst return in a calendar year in more than a decade.

The resurgence of old-economy energy stocks comes as U.S. oil prices skyrocket. West Texas Intermediate crude prices recently hit their highest level since 2014 and topped $85 per barrel. And natural gas prices more than doubled in the first 10 months of 2021. In the past, these sharp price spikes have been bullish for energy stocks. Energy was the top-performing S&P 500 sector in 2007 and 2016, for instance, when WTI prices surged 58% and 45%, respectively, in those calendar years.

Many investment firms and the U.S. Energy Information Administration are forecasting higher energy prices to persist in 2022, which bodes well for fossil fuel energy stocks, even as the world is focused on going green. We’ll explain why and tell you the best way to make a strategic investment in this sector. Returns and data are through November 5, unless otherwise noted.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM KIPLINGER'S PERSONAL FINANCEView All

Prescription for 2022 - These Health Care Stocks Should Thrive

Pharmaceutical and health sciences firms are riding powerful demographic trends amid a golden age of innovation.

7 mins read
Kiplinger's Personal Finance
January 2022

Where to Invest in 2022

Investors will have to curb their enthusiasm as markets get back to normal.

10+ mins read
Kiplinger's Personal Finance
January 2022

Best Sources of Emergency Cash

Even if you´re debtaverse, having a credit card to pay for emergencies could be an important lifeline

3 mins read
Kiplinger's Personal Finance
January 2022

A Guide to 401(k) Plans

Consider these strategies to get the most out of your savings.

3 mins read
Kiplinger's Personal Finance
January 2022

How to CRUSH Your Savings Goal

To cross the finish line when you want, find the right target for your retirement savings and follow our training regimen.

10+ mins read
Kiplinger's Personal Finance
February 2022

FINANCIAL FIRMS THAT PUT THE CUSTOMER FIRST

We evaluated major banks, credit card issuers, mortgage lenders, and home and auto insurers to see how well they treat their clients.

10+ mins read
Kiplinger's Personal Finance
February 2022

Make the Most of Your 401(k)

We weigh in on a baker’s dozen of the most popular actively managed retirement plan funds.

10 mins read
Kiplinger's Personal Finance
February 2022

Alternative Investments for the Rest of Us

These portfolio diversifiers aren’t just for the wealthy.

5 mins read
Kiplinger's Personal Finance
February 2022

My 3-Day Rule for COVID 3.0 Volatility

My three-day rule states that upon any news-driven market crisis, wait three business days to move money.

2 mins read
Kiplinger's Personal Finance
February 2022

India Is on a Tear

Massive modernization presents opportunities for investors.

5 mins read
Kiplinger's Personal Finance
February 2022