Energy stocks outperform so far this year as natural gas prices soar
Energy stocks have been outperforming other sectors and the broader market due to the surge in natural gas prices, driven by colder-than-expected weather, increasing LNG exports, and growing electricity demand. The S&P 500 Energy ETF is up more than 7%, compared to the broad-based index's rise of almost 4%. As a result, traditional oil and gas players like ExxonMobil and Chevron are seeing significant gains, with their stock prices rising by 3% and 9%, respectively.
- This year's surge in energy stocks highlights the importance of capital discipline, as companies prioritize returning cash to shareholders while maintaining profitability.
- Can this upward trend persist if natural gas prices reverse course or face increased supply chain disruptions, potentially impacting the industry's ability to maintain its current production levels?