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3 Energy Stocks Investors Should Invest in Before 2025 is Over

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Key Takeaways

  • Phillips 66 saw 99% crude utilization in the September quarter, its highest level since 2018.
  • Valero Energy operates 15 refineries and focuses on efficiency to benefit from lower crude input costs.
  • Oceaneering is positioned to gain as oilfield service demand stays favorable and ADTech growth picks up.

As we look ahead to 2026, investors interested in the energy space should focus on stocks that are well placed to gain next year. While oil prices are expected to remain subdued in 2026, typically a headwind for much of the energy sector, not all stocks are vulnerable. In fact, companies such as Phillips 66 (PSX - Free Report) , Valero Energy Corporation (VLO - Free Report) , and Oceaneering International (OII - Free Report) remain compelling opportunities that investors should not overlook.

Oil Price to Decline in 2026

The U.S. Energy Information Administration (“EIA”), in its latest short-term energy outlook, stated that the spot average price of West Texas Intermediate crude will be $65.32 per barrel this year, lower than the $76.60 per barrel recorded last year. For 2026, EIA expects the commodity price to decline further to $51.42 per barrel. EIA stated that rising worldwide oil inventory will hurt the commodity price.

Low oil prices benefit the refining industry, as companies process raw crude to produce final products like gasoline, diesel and jet fuel.Thus, softness in crude prices will likely benefit refining operations in 2026.

Also, with the advent of advanced drilling techniques like horizontal drilling and hydraulic fracturing (fracking), the cost of operations in oil and gas resources has declined considerably over the years, leading to low break-even costs. Thus, although oil prices will likely be soft next year, the cost of operations for exploration and production activities might be profitable. Since oilfield service companies assist upstream companies in efficiently drilling oil and gas wells, demand for oilfield services will likely be favorable in 2026.

3 Stocks to Bet on Right Away: PSX, VLO, OII

Phillips 66 is a leading refinerand generates significant earnings from its refining business.PSX recognized crude utilization of 99% in the September quarter of this year, which was the highest quarterly utilization since 2018. Phillips 66 is likely to maintain its strong margin since it is well-positioned to continue to use Canadian heavy crude, thereby replacing other sources that are becoming scarce.

Since PSX employs heavy crude, which trades at a discount to lighter crude like WTI, the company is well-positioned to capitalize on lower oil prices in 2026. PSX currently sports a Zacks Rank #1 (Strong Buy).

Valero Energy is a leading independent refiner in the world, having 15 refineries with a combined refining capacity of 3.2 million barrels per day. VLO is strongly focused on maximizing its profit through efficiently utilizing its refineries and through selectively investing in profitable projects.  

Like Phillips 66, Valero Energy is also expected to capitalize on low input costs next year. VLO currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oceaneering is well known for providing offshore energy companies with robotic solutions, along with engineered services and products and is thus part of the oilfield service space. For 2026, Zacks #1 Ranked OII expects its Aerospace and Defense (ADTech) business to continue contributing to its growth, with activities to pick up in the second and third quarters.

Notably, with oilfield services demand to remain favorable in 2026, Oceaneering is well-positioned to gain.


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Valero Energy Corporation (VLO) - free report >>

Oceaneering International, Inc. (OII) - free report >>

Phillips 66 (PSX) - free report >>

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