When the COVID-19 pandemic forced countries to shut down, oil prices were at their lowest. Sentiment shift considerably since those dark days. U.S. crude prices hit a 32-month high on June 15. Top oil traders now forecast crude prices at $100 a barrel before the end of the year.
What should investors do next?
XLE is a popular ETF that investors may hold. Vertically integrated companies like Exxon (NYSE:XOM) are appealing. Though the stock is hovering near its 52-week high, it is still trading at a discount. Fundamentally, appeasing the green movement will weigh on the stock. Similarly, Royal Dutch Shell (NYSE:RDS-B), is trading near its highs for the year. It, too, has an aggressive net-zero emissions plan.
Accelerating the green energy projects will raise operating costs. This is necessary because consumers want these firms to invest in a cleaner future.
Thanks to rising energy prices, RDS and XOM operating margins will expand. This will give it plenty of cash flow to invest in clean energy projects. By doing so, clean energy investors could buy these stocks instead of risky startups. That gives investors exposure to the improving energy market and in the new age green energy alternatives.
