Meanwhile, the energy industry has grown more efficient after cutting costs in response to the plunge in crude oil prices in previous years, so they are now in a better position to improve revenue at lower oil prices.
“It’s a much better-run sector today,” Stephanie Butcher, a fund manager at Invesco Perpetual, told the WSJ. “A few years ago management teams were choosing volume over value; today it’s all about cost control.”
Market observers and analysts argue that U.S. energy stocks are in a position to outperform broader equity markets this year, even if oil prices don’t move higher.
“As long as oil prices don’t collapse, equities should grind higher,” Jon Morrison, oil equity analyst with CIBC Capital Markets, told the WSJ.
For more information on the oil market, visit our oil category.