
Over the past 20 days, the S&P 500 fell 8% due to tariff fears and economic uncertainty. However, oil and gas stocks outperformed, with the Energy Select Sector SPDR ETF (XLE) rising 0.1% over the same period. Unlike past corrections driven by energy demand shocks, this downturn highlights the sector’s defensive appeal.

https://360miq.com/tool?code=SPY,XLE&tf=d&from=2024-12-29&to=
Table of Contents
Recent 20-day Performance Highlights
- ExxonMobil (XOM): +3.2% (3.5% dividend yield).
- Chevron (CVX): +3.1% (4.3% dividend yield).
- ConocoPhillips (COP): +3.2% (3.1% dividend yield).
Stocks benefited from stable energy demand, high dividends, and oil prices stabilizing near $70/barrel despite broader market turmoil.

https://360miq.com/tool?code=COP,CVX,XOM&tf=d&from=2024-12-29&to=
Why Oil & Gas Stocks Outperformed
- Defensive Demand: Energy remains essential, insulating the sector from economic swings.
- Attractive Dividends: High yields (e.g., Chevron’s 4%) drew investors amid falling bond yields.
- Geopolitical & Supply Factors: U.S. sanctions on Iran/Venezuela and OPEC+ production restraint tightened supply, cushioning prices.
Historical Parallels
- 2008 Crisis: Demand collapse crushed oil prices (-77%) and stocks.
- 2022 Correction: Supply shocks (Russia-Ukraine war) drove oil prices and energy stocks higher (+16% for XLE).
The current correction mirrors 2022, with supply constraints (not demand weakness) supporting sector resilience.
Current Market Dynamics
- Oil Prices: ~$70/barrel (IEA), near 3-year lows due to trade tensions and moderate demand growth (~1 mb/d in 2025).
- OPEC+ Policy: Plans to unwind voluntary cuts in April 2025 may boost supply, though geopolitical risks (sanctions, Middle East tensions) could offset this.
Future Outlook & Catalysts to Watch
- Supply vs. Demand: IEA forecasts 2025 global supply growth (+1.8 mb/d), potentially outpacing demand if economic growth slows.
- Economic Health: Trade wars and inflation could suppress oil demand.
- Energy Transition: Rising renewables adoption may pressure long-term fossil fuel reliance.
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