Oil and Gas Price Update: H1 2023 in Review

Experts see opportunity in oil and gas stocks

There are plenty of options for investors when it comes to oil and gas companies — firms in this space fulfill a variety of purposes, including drilling, extraction, oilfield services, oil refining and transportation.

Craig Golinowski, president and managing partner with Carbon Infrastructure Partners, told the Investing News Network (INN) that oil and gas equities are back at price points seen 20 to 24 months ago

“You're sort of sitting there in an equity getting paid to wait — the balance sheet looks pretty good, and the stock is essentially where it was 24 months ago,” he said. “I mean, it feels to me like it's pretty asymmetric to the upside here.”

Funds have faced struggles as well this year, with only the United States Gasoline Fund (ARCA:UGA) showing a positive return; it was up 5.87 percent year-to-date as of July 11, as per VettaFi.

Oil and gas market still facing COVID-19 aftershocks

Golinowski told INN that the oil and gas space is still recovering from the tough times seen during COVID-19.

The expert pointed to the service side of the oil and gas industry in particular, saying disruptions in this segment have caused difficulties. “It’s been a bumpy ride,” he commented to INN.

“The service industry literally was partially disbanded because everybody had to stop bleeding cash — so every job cut and every production cut, everything was just completely shut in,” Golinowski added. This downturn eventually led to a tremendous rush when circumstances began returning to normal, which sparked inflationary pressures.

“Fundamentally, the oil and gas services industry is tight,” Golinowski said. "The equipment is consolidated; there's very few players left in it. And those companies, I think, are going to hang on to a lot of pricing power."

Investor takeaway

It's clear that the oil and gas sector continues to feel the impact of the COVID-19 pandemic, even as it's being strongly affected by new issues like Russia's ongoing war in Ukraine.

Price volatility is the name of the game when it comes to oil and gas, and so far in 2023 prices have let down investors.