Big oil stocks rally despite Democrats’ fossil-fuel stance
US oil and gas stocks, by far the worst performers last year, are standing out as the best in 2021 — a turnaround that might seem a bit surprising given the new balance of power in Washington.
Companies including Exxon Mobil Corp., Diamondback Energy Inc. and Marathon Oil Corp. have posted double-digit gains this year as a rebound in oil prices and the prospect of an economic recovery have outweighed risks to the industry from a Joe Biden administration. The S&P 500 Energy Index is up 12% this year compared to 2020’s 37% plunge.
However, Wall Street is now assessing whether those gains are sustainable as Democrats commit to speeding the shift away from fossil fuels. Companies that extract gas and oil from shale rock using a process known as fracking are already under pressure to reduce spending rather than invest in production. Any additional regulatory measures could be received poorly by investors.
