5 Buy-Ranked Energy Stocks For Dividend Investors In 2020

Last year turned out to be epic for U.S. stocks. The market’s relentless rally catapulted the key S&P 500 Index to new heights, logging its best year since 2013. As a matter of fact, the broadest measure of the equity market added as much as 28.9% to its value in 2019. But even as the books closed for a record-setting 2019, energy stocks remained the year’s big laggards.

Energy: The Worst-Performing S&P Sector

It was a wild ride for the energy market in 2019, setting pulses racing of even the steadiest investors. While major averages enjoyed their best year in nearly a decade, Energy was the least successful S&P 500 sector in 2019 with majority stocks in the Energy Select Sector SPDR Fund (XLE) languishing in bearish zone.

Let’s discuss the 2019 performance of oil and gas in detail:

Oil posted 34.5% rise last year - the biggest annual increase since 2016. In particular, WTI, the U.S. benchmark, jumped nearly 11% in December, aided in part by the agreement on a phase one trade deal between U.S. and China. The development – coming after months of wrangling – is seen to prop up the oil demand outlook on the back of revival in global economic growth. Also boosting oil, the OPEC+ group announced cutting output by as much as 500,000 barrels per day from Jan 1 for three months.

However, the improving oil market notwithstanding, WTI crude averaged $56.74 in 2019, around $8-a-barrel lower than the 2018 average of $65.06. This was mainly down to mounting concerns over wilting global demand due to trade war-induced slowdown at a time when U.S. shale output surge had heightened oversupply fears significantly.

Meanwhile, no major commodity had a worse 2019 than natural gas. The fuel endured a torrid year, registering its worst annual decline since 2014. Prices tumbled more than 25% last year, falling to multi-year lows of around $2.1 per MMBtu in between, as buyers fled the market over growing worries about record output, soaring flaring levels and concerns of an ongoing supply glut.

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