Expert: Fundamentals Point to Oil and Energy Resurgence

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Oil prices are down, and it's unclear whether they have hit bottom. But what is clear, Azuria Capital Chief Executive Officer Tavi Costa told Streetwise Reports, is that they won't stay down and many oil stocks are undervalued.

"Enough is enough" when it comes to the sell-off in the sector, Costa said.

"I also think that this sector is absolutely critical particularly for the next decade as we see the buildup of data centers, as we see the electrification trend continuing to play a role," he said. "All that is actually going to feed back into energy in a big way. So, you start putting all these things together. With oil prices where they are, I just suspect that we ... have completely priced out."

Brent crude oil fell by 14% year-on-year in 2025, despite occasional rallies driven by geopolitical tensions — a trend that Goldman strategists, led by Daan Struyven, expect to continue, according to a report by Fiona Craig for InvestorsHub published on MSNBC January 12.

The team predicts that Brent will average US$56 per barrel and WTI US$52 per barrel in 2026, which is significantly lower than the current forward curves of around US$62 and US$58, respectively. This outlook is based on what the bank describes as an ongoing supply wave, leading to a surplus of approximately 2.3 million barrels per day.

"Rising global stockpiles point to mounting imbalance, with strategists arguing that 'rebalancing the market likely requires lower oil prices in 2026,' unless there are major supply disruptions or new production cuts from OPEC," Craig wrote. "Goldman's base-case scenario assumes no additional OPEC cuts next year, noting that the production increases seen in 2025 were deliberate and that recent price weakness reflects temporary supply strength rather than faltering demand."

Additionally, price gains were curbed as Venezuela, a member of the Organization of the Petroleum Exporting Countries, began reversing oil production cuts made under a U.S. embargo, according to a report by Nicole Jao on January 14 for Reuters that was published on TradingView. Crude exports resumed, with two supertankers leaving Venezuelan waters on Monday, each carrying about 1.8 million barrels of crude. This may be part of a 50-million-barrel supply deal between Venezuela and the United States to restart exports following the U.S. capture of Venezuelan President Nicolas Maduro.

'A Major Opportunity'

Costa said because of all this, "lots of people have lost interest in this sector." However, he likes to "find legacy industries and sectors that continue to be very relevant and that people have weak reasons to justify why they are so cheap."

He continued, "I think this is a major opportunity. I can see a resurgence of energy."

"What if we need more oil than we thought?" he said.

Global electricity demand is entering a phase of sustained, structural growth, according to a report by Bloomberg New Economy. The world's power grids must accommodate increasing loads from data centers, electric vehicles, industrial electrification, expanding air conditioning, digitalization, and AI. These changes are all accelerating simultaneously in an electrification supercycle, transforming electricity from a mere utility into the backbone of the global economy. According to BloombergNEF’s New Energy Outlook 2025, electricity demand is projected to grow by 34% over the next decade and by 75% by 2050.

Costa said there are similarities to when gold was down in 2018-2019.

"That's where oil is today," he said. "From the way I think about the world and the way I invest, this is where smart money comes in."

A resurgence of energy is possibly in the cards. "You have all of the ingredients there," he said. "You should be deploying some money in it."

It's important to focus on fundamentals in the sector and not on short bursts of news like the military action in Venezuela or strife in Iran, which will only hit prices temporarily.

Oil Is Not Going Away

While other energy sources like nuclear are attractive long-term, Costa said it takes a lot of time to develop new uranium mines and bring them into production. Oil will take some time to start up when demand hits, but it will be quicker than getting all of the pieces in play for a nuclear resurgence.

Uranium is "just not the answer over five or seven years," he said. "We just don't have the technology… to put those things into use in the short term."

"I don't think oil is going away," he continued.

While Costa said he doesn't like to pick specific stocks, he said energy ETFs look attractive because "they've been compressing in terms of energy and consolidation for a long time. And at any moment, you can see an explosion."

And while oil could be a good long-term solution for our energy needs, when it comes to data centers, the answer could be its cousin, natural gas, because of local availability, he said.

Here are some stocks that look to gain by a resurgence in oil and energy prices, including America's largest oil company, a natural gas giant, a major oil ETF, and a small-cap stock capitalizing on its natural gas stocks to help fuel data centers in the center of the country.

Exxon Mobil Corp.

Rick Rule of Rule Investment Media also said he foresees a significant opportunity emerging in the oil sector, and one of his top picks is Exxon Mobil Corp. (XOM:NYSE).

On November 5, 2025, Rule told Lou Basenese of The Big Skinny on YouTube that globally, the oil industry is "deferring US$2 billion in sustaining capital investments every single day." This will significantly impact output by 2027-2028, leading to higher prices, he explained. "That's arithmetic, not narrative," Rule emphasized. "When it begins to occur, you're going to see prices tighten up … Exxon Mobil Corp., as an example, is selling at a 40% discount to my NPV (net present value) calculation. And I think the NPV of Exxon doubles or triples in the three- to four-year timeframe. Buying an NPV double at a 40% discount on the biggest and best oil company in the world with a 3.5% dividend, that's my idea of a good time."

The company is a multinational oil and gas company based in Spring, Texas, near Houston, and is the largest direct successor to John D. Rockefeller's Standard Oil, formed in 1999 through the merger of Exxon and Mobil. According to a report by Khadija Saeed on Techstock2 dated December 22, 2025, the company was in the spotlight as investors considered a "lower-for-longer volatility" oil environment against Exxon's long-term growth strategy, potential shareholder returns, and ongoing project advancements, particularly in Guyana and the Permian Basin.

Late last year, Exxon released an updated corporate plan through 2030, and the market is still assessing its implications for XOM valuation and cash returns, the article noted. Exxon now anticipates by 2030: US$25 billion in earnings growth compared to 2024 (on a constant price and margin basis) and US$35 billion in cash flow growth compared to 2024. "ExxonMobil (XOM), the largest oil and gas company in the U.S., showed negative year-over-year dynamics but exceeded consensus expectations," according to a November 5, 2025, research note by Freedom Broker's Pigarev. "Production growth in Guyana and the U.S. Permian Basin drove operational records. The quarterly dividend was raised by 4% to US$1.03 per share."

Despite challenges in the oil market, Pigarev said the firm does not anticipate a significant correction in XOM shares. A sizable buyback program and a strong dividend yield of 3.7% should continue to support the stock. However, upside potential from current levels remains limited, he said.

"ExxonMobil increased shareholder payouts this quarter, raising the quarterly dividend by 4% to US$1.03 per share," the analyst wrote. "We reaffirm our target price of US$123 per share and maintain a 'Hold' rating," indicating a nearly 8% return on the stock at the time the note was written.

A Trefis research note released on November 25, 2025, stated that for the company, "Cost-cutting progress remains a key pillar, with Exxon on track to exceed US$18 billion in structural savings by 2030. Strategically, management is focused on high-return production growth in the Permian and Guyana, where project execution remains ahead of schedule. With a sub-10% net-debt ratio, Exxon enters 2026 positioned for stable investment, strong cash generation, and continued capital returns." Trefis' estimate for the stock was US$116, compared to US$116 per share when the note was written.

On January 3, John Navin of John Navin's Newsletter noted that the company's chart had "a bullish engulfing new high candlestick just hours before the Venezuela attack" (see chart at left). Also, Exxon "will always be an important player going forward," Kollmeyer quoted the Jefferies analysts as saying in her January 5 piece for MarketWatch.

Stock Analysis noted that according to 20 analysts, the average rating for XOM stock is "Buy." The 12-month stock price target is US$131.05, which is an increase of 4.31% from when they updated the page.

¹Exxon Mobil has a market cap of US$549.07 billion and a 52-week range of US$97.80 to US$122.68. It has 4.2 billion shares outstanding. Less than 1% of the company is owned by insiders and management and holding companies, and about 66% by institutions.

Top shareholders include The Vanguard Group Inc. with 10.14%, BlackRock Institutional Trust Co. with 5.24%, State Street Investment Management with 4.9%, Fidelity Management & Research Co. with 2.52%, and Geode Capital Management LLC with 2.28%.

Chevron Corp.

Chevron Corp. (CVX:NYSE) is the second-largest energy company in the U.S., following Exxon Mobil, and according to Investopedia, the third-largest natural gas company by market cap. It manages investments in its subsidiaries and affiliates, providing administrative, financial, management, and technological support to both domestic and international subsidiaries engaged in fully integrated petroleum, chemicals, and mining operations, as well as power generation and energy services.

It operates in 180 countries and maintains a strong network of retail gas stations under the Chevron, Texaco, and Caltex brands. The company is also actively pursuing alternative energy solutions.

According to a November 25, 2025, research analysis by Trefis, Chevron reported adjusted earnings of approximately US$3.6 billion, or about US$1.85 per share, for Q3 2025, exceeding analysts' expectations of US$1.68 per share. The quarter benefited from record production of around 4.1 million barrels of oil equivalent per day — a significant year-over-year increase — primarily driven by the recent acquisition of Hess Corporation. Operating cash flow (excluding working-capital changes) rose nearly 20% year-over-year to about US$9.9 billion, reflecting higher volumes and improved downstream/refining margins. While upstream earnings declined due to lower commodity prices, the downstream/refining segment experienced a strong profit recovery, helping to offset the weakness, Trefis noted.

"The company reaffirmed US$17–17.5 billion in 2025 capex, including Hess integration spending, while guiding production growth toward the top end of its 6–8% range as Hess assets continue to ramp," the Trefis research report said. "Management is targeting US$2–3 billion in structural cost savings by 2026, with Hess synergies expected to reach US$1.5 billion, helping lower its long-term breakeven to below US$50 Brent for covering capex and dividends."

Longer term, Chevron "projects over 10% annual adjusted free-cash-flow growth through 2030, steady 2–3% production growth, and a capex run-rate of US$18–21 billion, reflecting a strategy that leans on efficient, diversified upstream growth and disciplined reinvestment," Trefis continued. The research firm set a US$150 per share estimate on the stock, compared to US$150 per share at the time.

According to a Freedom Broker research report by Analyst Sergey Pigarev on November 4, 2025, "The year's key milestone was the closing of the Hess Corp. acquisition in July, which drove CVX's oil and natural gas production to record levels. Share repurchase was maintained at US$2.6 billion for the quarter. In our view, the stock offers limited upside from current levels. We reiterate our US$165 price target and confirm a 'Hold' rating."

The acquisition of the asset "underpinned record operating metrics for the company" and "shareholder returns remain robust," Pigarev wrote. "At the end of the quarter, the Board maintained the dividend at US$1.71 per share, implying a 4.5% yield at the current share price," the note said. "Chevron spent US$2.6 billion on buybacks during the quarter (flat q/q). Nonetheless, the number of shares outstanding was 12.9% higher than it was in the second quarter due to equity issued for the Hess acquisition."

According to 18 analysts, the average rating for CVX stock is "Buy," the site Stock Analysis noted. The average 12-month stock price target is US$172.33, which is an increase of 4.51% from the latest price.

¹Less than 1% of Chevron is held by insiders and management, about 6% by holding companies, and 68% by institutions. The rest is retail.

Top shareholders include The Vanguard Group Inc. with 9.09%, State Street Investment Management with 7.58%, Berkshire Hathaway Inc. with 6.06%, BlackRock Institutional Trust Co. with 4.69%, and Geode Capital Management LLC with 2.16%.

Its market cap is US$336.74 billion with more than 2 billion shares outstanding. It trades in a 52-week range of US$132.04 and US$169.37.

Vanguard Energy ETF

For a broad exposure to energy stocks, one possibility is the Vanguard Energy ETF (VDE:NYSE). The fund aims to mirror the performance of a benchmark index that evaluates the investment return of stocks within the energy sector.

According to its website, it is managed passively, employing a full-replication strategy when feasible and a sampling strategy if regulatory limitations require it.

It comprises stocks of companies engaged in the exploration and production of energy products like oil, natural gas, and coal. As of November 30, 2025, the fund included 109 stocks with a median market cap of US$58.6 billion, an earnings growth rate of 45.8%, and a return on equity of 12.9%. The fund's total assets at that time were US$8.8 billion.

According to a Morningstar Analysis of the fund, the portfolio maintains a cost advantage over its competitors, being priced within the least expensive fee quintile among its peers.

"The strategy’s management team earns an Above Average People Pillar rating," the website said. "The strategy's investment approach stands out and earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight quality exposure and yield exposure compared with category peers. A high-quality exposure means holding stocks that are consistently profitable, growing, and have solid balance sheets. And a high-yield exposure is rooted in holding high dividend-paying or buyback stocks."

¹The ETF is overwhelmingly held by institutions at 38%. Less than 1% is held by strategic corporations. Top shareholders include BofA Global Research with 2.76%, Morgan Stanley Smith Barney LLC with 2.5%, Wells Fargo Advisors with 1.89%, UBS Financial Services Inc. with 1.86%, and Beacon Capital Management Inc. with 1.59%.

Jericho Energy Ventures Inc.

Jericho Energy Ventures Inc. (JEV:TSX.V; JROOF:OTC; JLM:FRA) is an energy innovation firm at the intersection of energy and AI infrastructure.

"Leveraging our long-producing oil and gas joint venture assets and robust Oklahoma infrastructure, we are deploying scalable, on-site power solutions to build cutting-edge build-to-suit AI Data Centers," the company said. "With direct access to abundant, low-cost natural gas, we deliver efficient, high-performance energy solutions — reducing waste, maximizing output, and unlocking long-term value in the rapidly converging AI and energy markets."

In December, it announced a major advancement in immediate power accessibility at its first AI Data Center Campus in Noble County, Oklahoma, a key component of JEV's 41,000-acre energy portfolio. Recent regulatory updates by the grid operator, Southwest Power Pool, have accelerated the interconnection process for new generation resources. Additionally, a newly constructed 345 kV transmission line crossing Jericho's AI Campus site positions it for rapid grid interconnection and improved access to reliable power, providing 20 MW of immediately available capacity starting in January 2026.

This is supported by robust, scalable infrastructure with the potential to supply multiple gigawatts of combined grid power and natural-gas generation for custom data center development.

"Access to immediate, scalable power is the linchpin of successful data center development," said Brian Williamson, CEO of Jericho Energy Ventures. "With 20 megawatts available in early 2026 and SPP clearing a pathway to gigawatt-scale capacity, our AI Campus is now uniquely positioned to meet the surging energy demands of next-generation digital infrastructure."

Last fall, Jericho Energy Ventures Inc. announced it signed a non-binding Letter of Intent (LOI) dated October 6, 2025, with Smartkem Inc. (SMTK:NASDAQ), a leader in developing a new class of organic semiconductor technology, for a proposed all-stock business combination, according to a release.

If finalized, the Proposed Transaction would result in a Nasdaq-listed, U.S.-owned and controlled AI infrastructure company, merging low-cost domestic energy with advanced semiconductor packaging and materials to address the growing demand for AI compute capacity.

The proposed transaction aims to incorporate Smartkem's patented organic semiconductor platform into Jericho's infrastructure to accelerate the development of energy-efficient AI data centers designed for next-generation workloads, advanced AI chip packaging that reduces power consumption and heat, low-power optical data transmission for faster interconnects, and adaptable sensors for environmental monitoring and operational resilience, Jericho noted in the release.

¹Around 41% of Jericho's shares are held by management and insiders, the company said. They include CEO Brian Williamson, who owns 1.38%; founder Allen Wilson, who owns 0.99%; and board member Nicholas Baxter, who owns 0.49%.

Around 34% of shares are held by the company's "Top 10 external shareholders." The rest is in retail.

JEV's market cap is CA$28.86 million, and it trades in a 52-week range of CA$0.08 and CA$0.21. It has 304.03 million shares outstanding, about 220.98 million floating.