The non-renewable energy industry is one of the fastest recovering industries in 2021, with oil prices jumping from negative values in early 2020 to hover at near two-year highs now. This recovery is likely to continue in the near term, making energy stocks EOG Resources (NYSE:EOG) and Energy Transfer (NYSE:ET) attractive investment bets, we believe. Read on.Investors have been betting on energy stocks since early this year, given the rapid rise in economic and industrial activities with the progress made in controlling the COVID-19 pandemic. This is evidenced by the S&P Oil & Gas Exploration & Production Select Industry Index’s 68.3% gains year-to-date, versus the broader S&P 500 index’s 12.9% returns over this period.
Oil prices are currently hovering near their two-year highs, at more than $70 per barrel, driven by rising demand from major economies as industrial and manufacturing activities re-engage. As the major oil consuming emerging markets of India and Brazil recover from recent new waves of coronavirus, the demand for oil is expected to rise further in the near term. OPEC+ expects oil demand to rise 6.6% year-over-year in 2021.
Given this backdrop, we think EOG Resources, Inc. (EOG) and Energy Transfer LP (ET), which have gained more than 70% year-to-date, could be solid bets now.