The world is a crazy place right now. The US stock market is no different. The S&P 500 is down almost 9% YTD while the Nasdaq is down more than 14%. However, not all firms have suffered losses in value in 2022. The Energy Select Sector SPDR Fund (XLE) is up nearly 19% for the year. Some individual energy stocks have done even better, Haliburton (HAL) is up 34% this year. US Oil prices (which are at 2014 levels) have been on a nonstop upwards trajectory for a multitude of reasons. Most recently, a potential war in Ukraine. Energy companies remain a solid investment as COVID-19 restrictions continue to be dropped globally as the virus continues to be branded as endemic. These companies will also continue to keep stable dividends while oil prices remain elevated which makes them attractive for investors. Many large institutions are forecasting that oil prices will continue to push higher. Goldman Sachs, Bank of America, and JP Morgan have all mentioned the idea of triple-digit oil prices. It appears for now that investors are continuing to buy shares of energy companies even after many had a blockbuster performance in 2021.
It remains clear that in the week ahead, oil prices will continue to fluctuate heavily based on international issues. Investors must continue to remain cautious and not be afraid to reallocate their portfolios including energy holdings.