Even though investors are worried about a possible decline in demand for oil and gas because of the resurgence of COVID-19 cases, oil prices rose to $71 a barrel yesterday on rising Middle East tensions. As the demand for oil and gas is expected to be sustained in the foreseeable future, it could be wise to bet on fundamentally strong energy stocks like Continental Resources (NYSE:CLR), Cimarex Energy (XEC), and National Fuel Gas (NFG).While governments worldwide have been taking several measures to transition into a renewable-energy-driven sustainable future, crude oil and natural gas companies continue to witness increasing demand. As a result, OPEC and its allies reached a deal last month to increase overall production by 400,000 barrels per day monthly beginning this month.
The rapid spread of the highly contagious Delta variant of the coronavirus continues to worry investors about global oil demand. However, oil prices rose to $71 a barrel yesterday on rising Middle East tensions. Moreover, the International Energy Agency estimates a 1.5 million barrel per day shortfall for the second half of this year, indicating a tight market despite the gradual supply increase by the major oil-producing countries.
Amid this backdrop, it would be wise to bet on quality oil and gas stocks Continental Resources, Inc. (CLR), Cimarex Energy Co. (NYSE:XEC), and National Fuel Gas Company (NYSE:NFG) because of their solid financials and impressive growth estimates.