As oil prices continue to rise on increasing demand driven by a resumption in economic activity and increasing mobility globally, oil energy stocks are expected to continue benefiting. So, we think it could be wise to bet on Continental Resources (NYSE:CLR), Bonanza Creek (NYSE:BCEI), Vista Oil (VIST), and SandRidge (SD). These oil & gas companies are well positioned to generate significant returns in the near-term.Despite the energy sector having been one of the worst-hit sectors during the COVID-19 pandemic due to the cessation of economic activity globally and travel restrictions, voluntary production cuts by OPEC+ eventually drove an increase in oil prices. While production cuts may not continue for much longer, rising demand due to reopening economic activities and increasing mobility should drive oil prices higher in the coming quarters. And despite decent progress on U.S.-Iran talks regarding the lifting of the sanctions, Goldman Sachs (NYSE:GS) expects crude oil to rise to $80 per barrel by the end of the year.
Investors’ interest in oil energy stocks is evident in SPDR S&P Oil & Gas Exploration & Production ETF’s (XOP) 15.5% gains over the past month compared to the SPDR S&P 500 ETF Trust’s (SPY) 0.6% returns. According to ResearchAndMarkets, the global oil and gas pipeline market is expected to grow at a CAGR of more than 6% between 2021 - 2026.
Given this backdrop, we think it could be wise to bet on shares of oil energy companies Continental Resources, Inc. (CLR), Bonanza Creek Energy, Inc. (BCEI), Vista Oil & Gas, S.A.B. de C.V. (VIST), and SandRidge Energy, Inc. (SD). They are expected to continue benefiting from rising oil prices.