The energy sector has generated strong momentum since 2020 and was among the best performers in the first half of 2021. And because analysts expect the rallies in oil and natural gas prices to continue for the foreseeable future, the industry should keep thriving. So, we think small-cap stocks CONSOL (CEIX) and SilverBow (SBOW), which have generated substantial momentum lately, are poised to continue advancing in the near term. Let's discuss.The energy sector started picking up momentum in late 2020. And the sector ended the second quarter of 2021 as the S&P 500’s best performer with a staggering 45.6% gain. And this impressive momentum shows no signs of slowing.
West Texas Intermediate crude futures, the U.S. oil benchmark, crossed $80 per barrel last week for the first time since November 2014 amid heightened demand and tight supply. Natural gas prices are also at record-high levels, which is causing a greater demand for oil and fueling an already strong oil price rally. Analysts expect the supply deficit to continue, pushing the oil prices to even above $100 per barrel. Furthermore, the Department of Energy recently stated that it has no immediate plans to ease the price rally. The industry trends have lately been motivating investors to bet on energy stocks.
Because the price momentum is not expected to end anytime soon, we think red-hot small-cap energy stocks, CONSOL Energy Inc (NYSE:CNX). (CEIX) and SilverBow Resources, Inc. (NYSE:SBOW), which are currently trading above their respective 50-day and 200-day moving averages, could be solid bets now.