Exxon Mobil Corporation (XOM Quick QuoteXOM - Free Report)  and Saudi Arabia oil producer Aramco challenged predictions suggesting that oil demand is on the verge of reaching its peak.

Both companies emphasized the need for continued investments in conventional oil and gas resources as part of the transition to cleaner energy.

The companies highlighted the importance of carbon capture and storage, a climate mitigation measure that raises concerns among environmentalists. It represents one of the most effective methods to reduce emissions from fossil fuels.

The companies cautioned against rapid reductions in oil consumption due to the escalating global demand for energy, emphasizing the potential risks associated with such a hasty transition.

The oil and gas sector consistently encounters criticism from environmental activists. Following a challenging period during the peak of the pandemic, the industry witnessed a revival due to the increased oil and gas prices.

The existence of climate change and the necessity to decrease carbon emissions is essential. The companies claim that big oil plays a crucial role in meeting the world’s energy requirements. The industry can simultaneously develop strategies to reduce emissions.

Aramco’s CEO, Nasser, anticipates a record level of oil consumption, ranging from 103 million to 104 million barrels per day in the second half of this year. Nasser also expects demand to rise to 110 million barrels by 2030, which makes it crucial to explore and develop new sources of production rather than reducing production.

Per ExxonMobil, the fossil fuel sector will require government assistance to facilitate its transition. This may come in various forms, such as financial incentives for technology advancement, the establishment of carbon markets, or regulatory enhancements aimed at expediting project construction.

ExxonMobil remains committed to investing in decarbonization efforts. The company also intends to continue supplying customers with the fossil fuel products required to meet the ongoing demand.

Price Performance

Shares of ExxonMobil have outperformed the industry in the past six months. The stock has gained 14.8% compared with the industry’s 12.9% growth.

Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

ExxonMobil currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

USA Compression Partners, LP (USAC Quick QuoteUSAC - Free Report) is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower.

USA Compression Partners has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for USAC’s 2023 and 2024 earnings per share is pegged at 30 cents and 58 cents, respectively.

Enerplus Corporation  is an independent oil and gas production company with resources across Western Canada and the United States.

Enerplus has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for ERF’s 2023 and 2024 earnings per share is pegged at $2.26 and $2.66, respectively.

Helix Energy Solutions Group, Inc. (HLX Quick QuoteHLX - Free Report) is an international offshore energy company that provides specialty services to the offshore energy industry, with a focus on their growing well intervention and robotics operations. HLX has witnessed upward earnings estimate revisions for 2023 and 2024 over the past 60 days.

The Zacks Consensus Estimate for Helix Energy’s 2023 and 2024 earnings per share is pegged at 48 cents and 87 cents, respectively. HLX currently has a Zacks Style Score of A for Momentum.