3 Energy Stocks to Buy on Continued Geopolitical Turmoil

Industry Overview - The energy sector has shown resilience post-2022 supply shock, with the Energy Select Sector SPDR (XLE) increasing by 7.3% year to date as of September [1] - Growth in oil refiners has been a significant driver, benefiting from favorable spreads between oil and distillates, while explorers, producers, and equipment/services sectors have also gained [1] Geopolitical Factors - Geopolitical tensions, particularly between Israel and Iran, have significantly impacted the energy sector, with escalating threats of broader conflict [2] - Iran, a top 10 global oil producer, reached production levels of over 3.3 million barrels per day (bpd) in August, exporting about 2% of global supply [3] Oil Price Dynamics - OPEC and OPEC+ have agreed to increase joint output by 180,000 bpd from December as part of a supply plan for 2025, which is expected to drive up oil demand and prices [4] - Oil prices have recently climbed, with Brent crude surpassing $80 per barrel for the first time since August, closing at $80.93 per barrel, and WTI crude at $77.14 per barrel [4] Investment Opportunities - The cyclical nature of the energy sector suggests a potentially strong year ahead, prompting a focus on stocks well-positioned for investment [5] - Companies with strong growth potential include: - Sasol Limited (SSL) with an expected earnings growth rate of 174.4% and a Zacks Rank of 2 [7] - Core Laboratories Inc. (CLB) with an expected earnings growth rate of 18.8% and a Zacks Rank of 2 [8] - Nine Energy Service, Inc. (NINE) with an expected earnings growth rate of 35.8% and a Zacks Rank of 2 [9]