Colder weather will create seasonal demand for energy stocks. In Europe, lower imports of energy from
Russia created a severe shortage. Not only will Europeans need to cut energy consumption, but they
must also pay more for its limited supply.
In the oil sector, the OPEC+ supply cut will help markets. OPEC+ cut oil production from 2 million barrels
a day to 1 million. This should keep oil prices at $85 - $100 at a minimum.
Investors may consider energy firms like Antero Resources (AR) and Occidental Petroleum (OXY).
Berkshire’s Warren Buffett holds a 20% stake in OXY stock. Should shares drop, he could increase his
holding. He has the option to buy out the firm, too.
Exxon (XOM), ConocoPhillips (COP), and Chevron (CVX) are the best U.S. firms to consider. They pay a
dividend, which will appeal to income investors.
In Canada, Cenovus Energy (CVE) trades at a P/E of only 11 times. Its dividend is less appealing than that
of its U.S. counterpart. Enbridge (ENB), a pipeline, is trading in a severe downtrend. High-yield seekers
may consider ENB stock today.
Your Takeaway
Investors are not too late to add energy stocks. Despite the rise, the upside will continue. The Energy
Select ETF (XLE) would give investors exposure to the sector.
