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There’s Still Reason To Be Bullish On Oil Stocks


2022 has, so far, been a remarkable year for energy investors. If you own stock in the big three US oil companies which, in the interest of full disclosure I should say that I do, you are looking at some pretty remarkable year-to-date gains. You are up 57% on Chevron (CVX), 83% on Exxon Mobil (XOM), and a whopping 90% on Conoco Phillips (COP). Oh, and in case you hadn’t noticed, that is in a year when the S&P 500 is down 22.8%!  That gives all of us smart people who follow Oilprice.com a chance to scream “I told you so!” at the top of our lungs, but the pressing question is where do we go from here? Should we all be selling, or is this a time to add to our positions?

If you want to sell, good luck to you. You are, as my old boss repeatedly told me, never wrong to take a profit, especially when that is a 57-90% profit in 10 months. However, there are plenty of reasons to think that as 2022 ends and we get into 2023, the outperformance of oil stocks is only going to continue.

First and foremost, those three stocks are all at or near record highs despite the fact that oil is around 30% below its year-to-date peak in March. Of course, at just under $90/barrel for WTI, crude is still above its multi-year average price but, as I said last week, there are plenty of reasons to think that a reverse is coming, and I believe it will move higher over the next few months.

Sure, there are questions about demand as central banks around the world try to rein in the inflation…

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EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
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