Energy Is Leading in 2026—But Are the Oil Majors Cracking?

Core Viewpoint - The energy sector is experiencing mixed performance, with a notable year-to-date gain of over 18%, but recent earnings reports from major oil companies raise concerns about sustainability amid a global oil surplus and weaker demand [2][3][7]. Earnings Performance - Major oil companies, including ExxonMobil, Chevron, ConocoPhillips, and Shell, reported mixed Q4 2025 earnings, with Chevron beating EPS expectations but missing revenue forecasts by $2.39 billion, while ConocoPhillips and Shell missed both EPS and revenue targets [4][5]. - Following the earnings reports, ConocoPhillips and Shell saw their shares decline by more than 2% and 5%, respectively, with Shell's year-to-date gains erased, while ExxonMobil and Chevron maintained gains of 19% and 15% year-to-date [5]. Future Guidance - Chevron forecasts a compound annual growth rate (CAGR) of approximately 10% for cash flow from operations and production in 2026, expecting to generate an additional $12.5 billion in free cash flow by year-end [6]. - ConocoPhillips plans to reduce capital expenditures by $1 billion in 2026, while Shell aims to cut operating costs by $1 billion this year [8].