Energy Ended Up as a Good Bet Last Year. But Now What?

Oil prices soared in 2021, giving a boost to the stocks of energy companies. But with the world shifting toward greener alternatives, don’t count on that trend continuing.

Energy companies defied the odds last year.

Despite a pandemic and pressure to phase out fossil fuels to combat global warming, the share prices of major energy companies outshone the rest of the S&P 500.

Oil and natural gas prices, which soared 59 percent, were the main impetus for the energy stock rally.

But the boom wasn’t a steady one. Although energy stocks in the S&P 500 rose around 50 percent, it was an up-and-down year.

“The ride getting there has been extreme,” said Liz Ann Sonders, the chief investment strategist at Charles Schwab. She cautioned investors thinking of jumping in now to “be mindful of the peril of chasing sector performance based on what it has done in the past year.”

In 2021, oil prices rebounded from

Keep reading this article on The New York Times Energy & Environment.

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