Oil sector performance
The Energy Sector comprises companies whose businesses are dominated by either of the following activities: The construction or provision of oil rigs, drilling equipment and other energy related service and equipment, including seismic data collection. Sector weighting recommendations are provided by independent, third-party research firms to help further refine your analysis. Some sectors get "over," "market," or "under" weighted, which means that the research firm recommends that more, the same, or less of the sector should be held in your portfolio than is held in the market. Learn more about the average recommendation holding period and methodology of the research firms:. All dates and times are reported in ET. Chart Performance enables you to chart and change performance timeframe of daily percent change for the indices as well as the ability to add a user-entered symbol.
Dow Jones U.S. Oil & Gas Index
While the stock market has boomed, energy stocks have not. Indeed, they have been the worst-performing sector over the last decade. This is particularly ironic, since U.
Why the retreat from the energy sector? Is it because of poor economic performance by companies themselves, compared to the overall market and other sectors, such as Big Tech? After all, this year period encompasses the — oil price collapse. Or is it because of the growing impact and scale of ESG environmental, social and governance investing?
The methodology is that which IHS Markit applies for companies to assess sentiment among investors. The results come to the clear conclusion that economic performance is significantly more important than ESG considerations at this time. But the survey also finds that ESG and climate are weighing on overall investment attractiveness of the energy sector and will continue to grow in importance. The investors identify commodity price volatility, low return on invested capital and long-term supply-demand imbalances as the main factors that lead to investment underperformance historically.
As one of the respondents puts it, "There is a general apathy towards the sector as a result of not having made money over a one-, three- or five-year period. Investors have really pushed for a conversion into a more returns-based model, where they can get real visibility over what kind of cash flow they can look at. They believe that a rotation back into the energy sector is contingent on the supply-demand balance, conservative capital strategies and an improving outlook for the global macro and trade tensions.
Sixty-three percent of respondents agree that the oil and gas sector is currently undervalued. A minor portion of respondents, who are less optimistic, believe that current valuations are fair when considering their outlook for commodity prices and long-term uncertainty around terminal values.
One respondent observes: " When we see capital flight out of the sector [departing] from the long-term fundamentals of demand. Investors underscore that even though climate change is not a direct driver of their investment decisions, addressing ESG concerns is critical to address public pressure and reduce risk. In the words of a major North American private equity firm: "Companies need to focus on articulating their story [on climate] to demonstrate what they are doing.
Being good stewards from an ESG standpoint is risk-reducing. It is not just about being a good citizen but also about making your business better. When considering companies that diversify into clean tech and zero- or low-carbon initiatives, most investors base their view on the merits. They foremost look at the return profile of the investment compared to other uses of capital.
Second, they weigh the strategic rationale and core competencies of the business to determine whether it will create meaningful value.
Approximately half of the study population has experienced investing in renewables. Regardless of their involvement, nearly all institutional investors state there are not sufficient investable companies for them to invest at scale. Many participants said that the return profile of renewable companies has been subpar.
Only a few investors cite success investing in the space, noting the importance of selectivity and timing. Looking ahead, investors cite uncertainty around the energy transition — about future supply and demand, the onset of peak demand, developments in the Middle East, the U. Still, challenging as these issues on politics, regulation, investment and technology might be, investors see potential rising value in oil and gas and renewed interest in the industry.
Under any assumption, the world will continue to demand fossil fuels for decades. We still need these commodities, and these companies just need to do the best they can to reduce their impact on the environment. Sign up for free newsletters and get more CNBC delivered to your inbox. Get this delivered to your inbox, and more info about our products and services.
All Rights Reserved. Data also provided by. Skip Navigation. Markets Pre-Markets U. Key Points. It revealed that investors have retreated from investing in energy stocks because of the sector's underperformance due to commodity price volatility, low return on invested capital and long-term supply-demand imbalances.
VIDEO A 'sense of dread' in oil markets isn't going to 'dissipate quickly,' says IHS Markit. Squawk Box Asia. Related Tags.
Op-ed: For Big Oil, this crisis will be different, and it may be irreversible. Andrew Logan, senior director of oil and gas at Ceres. What one of BlackRock's biggest climate critics thinks about Larry Fink's letter. Behind Walmart's push to eliminate 1 gigaton of greenhouse gases by Pippa Stevens. Read More.
News Tips Got a confidential news tip? We want to hear from you. Get In Touch. CNBC Newsletters. Market Data Terms of Use and Disclaimers.
As we, once again, move from one year to the next, how do we assess the oil and gas and chemical sectors' performance in and its prospects for ? Find information about the Energy sector and industry performance in the U.S. Alix Steel hosts a special report featuring insight from oil executives, analysts.
The industry also includes companies that provide drilling and well-maintenance services. A , Exxon Mobil Corp. As a result, oil markets have become extremely volatile, and investing in the oil and gas sector has become substantially more risky than usual. Prices and data in this article were accurate at the time of writing, but likely have changed significantly as a result of the aforementioned market volatility. All figures in this story are as of April 21,
An Article Titled oil and gas industry outlook already exists in Bookmark library. Is your organization prepared for the uncertainties, risks, and opportunities ahead?
Financial Times Close. Search the FT Search. Show more World link World.
Sectors and Industries
While the stock market has boomed, energy stocks have not. Indeed, they have been the worst-performing sector over the last decade. This is particularly ironic, since U. Why the retreat from the energy sector? Is it because of poor economic performance by companies themselves, compared to the overall market and other sectors, such as Big Tech? After all, this year period encompasses the — oil price collapse.
