It’s been a wild ride for energy stocks to say the least. Already reeling from low prices for crude oil and natural gas, the pandemic really hit the sector for a loop. Demand fell by the wayside as consumers stayed home and quarantined. Falling industrial production hit demand for natural gas and petrochemicals, and the continued lower pricing trend of renewables has changed how electricity is generated. Naturally, stocks in the sector sank.
But things may finally be turning a corner for the energy sector.
Thanks to the reopening of the economy, new vaccines and a return to near normalcy, energy prices have finally moved higher. With greater demand and limited supplies, stocks in the energy sector are finally turning a corner. Better still, dividend growth and buybacks are becoming normal again.
For dividend investors, the sector still offers plenty of risk. However, with the outlook getting brighter and valuations remaining cheap, energy stocks could offer a strong total return and new income prospects in the new year.
Find more about energy stocks here.
