Energy Stocks Rally Despite Stagnant Oil Prices
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 17 2026
0mins
Source: Benzinga
- Earnings Resilience: Integrated energy firms maintain profitability through diversified revenue streams, particularly in refining and chemicals, which insulates their balance sheets from oil price fluctuations, thereby reassuring investors and creating a compelling investment case even when oil prices remain stagnant.
- Investor Rotation: As investors shift capital from technology stocks to sectors with strong free cash flow and attractive dividends, energy stocks are favored for their high dividend yields and share buyback programs, driving demand for shares independent of oil price movements.
- Geopolitical Risks: While current oil prices are not driven by geopolitical factors, market concerns over supply disruptions from regions like the Middle East and Russia add a risk premium to energy equities, with investors willing to assign higher value to companies that could benefit from unexpected supply tightening.
- Technical Strength and Market Sentiment: Many market participants view energy equities as a hedge against inflation, and although commodity prices do not provide immediate catalysts, this sentiment creates a feedback loop that supports stock prices, reinforcing the rally in energy stocks.
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Analyst Views on CVX
Wall Street analysts forecast CVX stock price to fall
19 Analyst Rating
15 Buy
4 Hold
0 Sell
Strong Buy
Current: 184.910
Low
158.00
Averages
176.95
High
206.00
Current: 184.910
Low
158.00
Averages
176.95
High
206.00
About CVX
Chevron Corporation is an integrated energy company. The Company produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance its business and industry. The Company’s segments include Upstream and Downstream. Upstream operations consist primarily of exploring for, developing, producing and transporting crude oil and natural gas; liquefaction, transportation and regasification associated with LNG; transporting crude oil by major international oil export pipelines; processing, transporting, storage and marketing of natural gas; carbon capture and storage; and a gas-to-liquids plant. Downstream operations consist primarily of the refining of crude oil into petroleum products; marketing crude oil, refined products, and lubricants; manufacturing and marketing of renewable fuels, and transporting of crude oil and refined products by pipeline, marine vessel, motor equipment and rail car.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Acquisition Agreement: Chevron announced its $53 billion acquisition of Hess on October 23, 2023, and despite facing legal challenges from ExxonMobil, successfully closed the deal on July 18, 2025, demonstrating resilience and determination in its M&A strategy.
- Legal Dispute Impact: ExxonMobil raised objections due to its business relationship with Hess, causing over a year of delays; while initially viewed negatively, this provided Chevron an opportunity to consolidate resources before oil prices surged.
- Financial Condition Changes: Following the acquisition, Chevron's debt levels increased, with a debt-to-equity ratio rising from 0.12x to 0.25x, yet the company remains financially robust, showcasing its ability to withstand risks in a high oil price environment.
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See More
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- Energy Conservation Advocacy: Chevron's president of downstream, midstream, and chemicals, Andy Walz, encourages Americans to drive less and conserve energy, emphasizing that energy-saving practices are essential to cope with the challenges posed by high fuel prices.
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See More
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See More
Energy Stocks Thrive Amid Iran Conflict
- Oil Price Volatility: The Iran conflict has led to the closure of the Strait of Hormuz, impacting global oil prices; however, many energy companies have learned to operate profitably in low-price environments, enhancing their shareholder return capabilities.
- Chevron's Performance: Chevron (CVX) has seen its stock rise nearly 24% this year, with expected daily oil equivalent production of 3.98 to 4.1 million barrels in 2026, and a 35% increase in free cash flow, showcasing strong profitability and solid financial health.
- ExxonMobil's Success: ExxonMobil (XOM) stock is up 26% this year and nearly 167% over the past five years, with free cash flow skyrocketing from nearly $30 billion in 2019 to nearly $52 billion in 2025, indicating success in cost control and strategic investments.
- Future of Renewables: NextEra Energy Resources (NEE), one of North America's largest power companies, is actively investing in renewable energy infrastructure to meet rising power demands, particularly from AI applications, although its significant debt is manageable due to strong EBITDA coverage of interest payments.
See More
Energy Stocks Surge Amid Iran War Impact
- Stock Price Surge: Energy stocks have risen this year due to the Iran war, with Chevron's stock up nearly 24% and ExxonMobil up 26%, reflecting market concerns over energy security.
- Chevron's Strong Performance: Following its acquisition of Hess in 2025, Chevron expects its upstream portfolio to produce between 3.98 million and 4.1 million barrels of oil equivalent per day in 2026, achieving a 35% increase in free cash flow despite a 15% drop in oil prices.
- ExxonMobil Cash Flow Growth: ExxonMobil's net cash provided by operating activities skyrocketed from $30 billion in 2019 to $52 billion in 2025, while free cash flow increased from $6.6 billion to $26.1 billion, showcasing its success in cost management and strategic investments.
- NextEra Energy Strategy: NextEra Energy Resources focuses on renewable energy and natural gas infrastructure, and despite significant debt, its EBITDA allows it to cover interest payments comfortably, with a trailing dividend yield of 2.75%.
See More
Chevron's Delayed Hess Acquisition Presents Strategic Opportunities
- Impact of Acquisition Delay: Chevron announced its $53 billion acquisition of Hess on October 23, 2023, but legal disputes with ExxonMobil delayed the deal until July 18, 2025; while initially seen as a setback, this delay allowed Chevron to capitalize on a more favorable market environment.
- Debt Level Changes: Following the acquisition, Chevron's debt-to-equity ratio increased from 0.12x two years ago to 0.25x, indicating a significant rise in leverage, which, while still maintaining financial strength, could affect future financing capabilities.
- Opportunity from Rising Oil Prices: The geopolitical conflict in the Middle East has led to soaring oil prices in 2026, which will benefit Chevron through increased revenues and earnings, providing additional cash flow to focus on reducing leverage.
- Dividend Attractiveness: With a dividend growth streak exceeding 25 years, Chevron's current 3.8% yield becomes particularly appealing in a high oil price environment, potentially attracting more investors seeking stable income.
See More
Chevron's Complex Acquisition of Hess
- Acquisition Agreement: Chevron announced its $53 billion acquisition of Hess on October 23, 2023, and despite facing legal challenges from ExxonMobil, successfully closed the deal on July 18, 2025, demonstrating resilience and determination in its M&A strategy.
- Legal Dispute Impact: ExxonMobil raised objections due to its business relationship with Hess, causing over a year of delays; while initially viewed negatively, this provided Chevron an opportunity to consolidate resources before oil prices surged.
- Financial Condition Changes: Following the acquisition, Chevron's debt levels increased, with a debt-to-equity ratio rising from 0.12x to 0.25x, yet the company remains financially robust, showcasing its ability to withstand risks in a high oil price environment.
- Opportunity from Rising Oil Prices: The geopolitical conflict in the Middle East in 2026 has led to soaring oil prices, which Chevron expects to benefit from, as the additional cash flow will aid in reducing leverage and strengthening financial health, making its 3.8% dividend yield attractive to investors.
See More
Chevron Executive Urges Americans to Conserve Energy Amid High Gas Prices
- Rising Gas Prices Context: The blockade of the Strait of Hormuz due to the Iran war has pushed U.S. gas prices to $4.078 per gallon in April, the highest since 2022, creating economic strain on consumers.
- Energy Conservation Advocacy: Chevron's president of downstream, midstream, and chemicals, Andy Walz, encourages Americans to drive less and conserve energy, emphasizing that energy-saving practices are essential to cope with the challenges posed by high fuel prices.
- Long-Term Outlook: Walz warns that high global oil prices make it unlikely for U.S. gas prices to decrease in the short term, stating there is no
See More
Middle East Turmoil Boosts Energy Stocks
- Chevron's Strong Position: Chevron is benefiting significantly from the risks associated with Middle Eastern oil supplies, with its robust operations in the Permian Basin making it a top choice among Wall Street analysts, especially as its low-cost production ensures funding for dividends and capital expenditures even if oil prices fall to around $50 per barrel.
- ExxonMobil's Growth Outlook: As the world's second-largest energy company, ExxonMobil expects to increase its earnings by $25 billion by 2030 and generate an additional $35 billion in free cash flow, showcasing its strong market position and financial health, which appeals to income investors.
- Energy Transfer's Rising Demand: While Energy Transfer's revenue isn't directly driven by oil and gas prices, the disruption in Middle Eastern supply has increased demand for U.S. oil and gas, with the company operating over 140,000 miles of pipeline and transporting 32 million BTUs of natural gas and 7 million barrels of crude oil daily, expecting long-term distribution growth of 3% to 5%.
- Investor Focus: Amid the uncertainty in the Middle East, Wall Street analysts are increasingly focused on energy stocks like Chevron, ExxonMobil, and Energy Transfer, although the Motley Fool analyst team suggests there are 10 other stocks with greater investment potential, urging investors to choose wisely.
See More
