With crude oil futures climbing and energy sector ETFs showing strong performance, two stocks—Occidental Petroleum and the XLE energy ETF—stand out as compelling buys. Rising global demand and geopolitical volatility are fueling upside potential.
- Crude oil futures (CL=F) up 6% over the past month
- XLE ETF up 8.2% year-to-date
- OXY stock up 17% in 60 days
- OXY guidance: 1.2 million BOE/day output in 2026
- OXY dividend yield: 3.8%
- Energy sector P/E ratio: 9.4x (below 10-year average)
Energy markets are experiencing renewed strength, driven by a surge in crude oil prices and increased investor interest in energy equities. Crude futures (CL=F) have risen over 6% in the past month, reflecting tighter supply conditions and persistent global demand. Within the sector, the Energy Select Sector SPDR Fund (XLE) has gained 8.2% year-to-date, signaling broad-based momentum. Occidental Petroleum (OXY) has emerged as a top performer, with its stock up 17% over the last 60 days. The company’s robust production growth in the Permian Basin and strategic focus on carbon capture have attracted institutional attention. OXY’s production guidance for 2026 forecasts output of 1.2 million barrels of oil equivalent per day, up from 1.1 million in 2024, indicating continued operational expansion. The combination of rising crude prices and strong earnings visibility makes these two assets particularly attractive. XLE, as a weighted basket of major energy firms, offers diversified exposure to the sector’s upside. OXY, with its high dividend yield of 3.8% and strong free cash flow generation, appeals to income and growth investors alike. Market participants are increasingly favoring energy stocks as inflation expectations stabilize and central banks signal a pause in rate hikes. The sector’s forward price-to-earnings ratio of 9.4x remains below its 10-year average, suggesting undervaluation relative to fundamentals.