Integrated Energy Sector Poised for Growth Amid Favorable Oil Prices
The integrated energy sector is poised for growth due to favorable oil prices and stable midstream demand. West Texas Intermediate (WTI) crude has been hovering around $90 per barrel, which is higher than the break-even prices of key resources in the United States.
Companies such as ExxonMobil Holdings Corp., Chevron Corp., BP plc, and Eni SpA are well-positioned to take advantage of this trend. Their integrated business model allows them to generate cash flows during all business cycles, making their prospects encouraging.
Eni expects its oil and gas production to grow about 4% annually through 2030, driven by new projects across Asia, Latin America, and Africa. The company's downstream activities involve chemical businesses that manufacture raw materials for making plastics.
The Zacks Oil and Gas Integrated International industry has outperformed the S&P 500 composite and the broader Zacks Oil - Energy sector over the past year. The industry has a trailing 12-month EV/EBITDA of 5.88X, which is lower than the S&P 500's 17.76X.