The Zacks Oil and Gas Integrated International industry, which includes major players like Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), and BP plc (BP), is experiencing a favorable market due to high crude oil prices, with West Texas Intermediate (WTI) trading above $90 per barrel. The U.S. Energy Information Administration (EIA) anticipates an average WTI price of $87.41 per barrel for the year, a notable increase from last year’s $65.40.
Over the past year, the industry has outperformed the broader Zacks Oil – Energy sector, with a 50.3% increase compared to 36.3% for the S&P 500 and 47% for the sector. Currently, the industry’s trailing 12-month Enterprise Value/Earnings before Interest, Tax, Depreciation, and Amortization (EV/EBITDA) ratio stands at 6.68X, significantly lower than the S&P 500’s 18.20X.
As companies diversify into renewables to meet the rising demand for cleaner energy, the integrated business model positions these firms well for sustained profitability amid ongoing high oil prices and robust demand for midstream services.
