In this article, we are going to discuss the 10 best American oil and gas stocks to buy now.
After a difficult end to 2025, WTI crude oil futures have surged by over 14% since the beginning of 2026 and are currently hovering around $65.5 per barrel. The recent uptick has been driven by a combination of factors, including the disruption of supply from Kazakhstan and the effects of the recent winter storm, which have curbed production in the United States. According to Citi analyst Anthony Yuen, the cold weather curtailed oil production by about 1.5 million barrels per day at its peak.
Moreover, the escalating tensions between Washington and Tehran have raised concerns over potential disruptions to oil flows from the Middle East, which account for roughly a third of global supply. If Iran retaliates and closes the Strait of Hormuz, it could disrupt the 20 million barrels per day of oil that flows through it. Moreover, the White House’s push to pressure countries away from buying Russian oil has also effectively reduced supply.
Meanwhile, natural gas prices also soared by over 62% earlier this month, driven by the boosted heating demand from the Arctic blast. However, prices have since fallen as traders booked profits, despite ongoing supply disruptions from the winter storm.
With that said, here are the best American oil and gas stocks to invest in.
Our Methodology
To collect data for this article, we reviewed companies in the oil and gas sector and shortlisted those with the highest number of hedge funds invested in them as of the end of Q3 2025, according to the Insider Monkey database. The following are the Best Oil and Gas Stocks According to Hedge Funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 59
Devon Energy Corporation (NYSE:DVN) is a leading independent energy company engaged in finding and producing oil and natural gas, with operations focused onshore in the United States.
On January 27, Wells Fargo raised its price target on Devon Energy Corporation (NYSE:DVN) from $37 to $43, while keeping an ‘Overweight’ rating on the shares. The analyst noted that the macro oil environment remains under pressure from the rising output from OPEC and non-OPEC players, with risks of a near-term supply glut driving down prices. As a result, Wells Fargo favors frameworks with low reinvestment and strong capital discipline.
Devon Energy Corporation (NYSE:DVN) also received a boost on January 26 when Susquehanna analyst Charles Minervino raised the firm’s price target on the stock from $42 to $45, while maintaining a ‘Positive’ rating on the shares. The revised target, which indicates an upside of 13% from the current levels, comes as the firm adjusted its targets in the E&P sector as part of a Q4 preview.
Susquehanna highlighted that the global oversupply and softer demand have put downward pressure on oil prices, prompting the firm to drop its 2026 WTI price assumption from $65 per barrel to $60. However, the analyst remains bullish on the long-term outlook for natural gas, driven by growing power demand from data centers and electrification.
9. Valero Energy Corporation (NYSE:VLO)
Number of Hedge Fund Holders: 60
Valero Energy Corporation (NYSE:VLO) is the world’s premier independent petroleum refiner and a leading producer of low-carbon transportation fuels.
Valero Energy Corporation (NYSE:VLO) posted strong results for Q4 2025 on January 29, beating estimates on both earnings and revenue, driven by a rebound in margins and higher throughput volume. Valero’s refining margin per barrel of throughput was up by over 61% YoY to $13.61, while average throughput volume surged to 3.1 million barrels per day, from almost 3 million bpd in the year-ago period. As a result, the refiner’s adjusted EPS for the quarter came in at $3.82, topping forecasts by $0.55.
Valero Energy Corporation (NYSE:VLO) reported $6 billion in adjusted net cash provided by operating activities in FY 2025, with the company returning $4 billion to shareholders, resulting in a payout ratio of 67% for the year. The refiner increased its quarterly dividend by more than 6% to $1.20 per share on January 22 and currently offers an annual dividend yield of 2.61%.
Valero Energy Corporation (NYSE:VLO) was also recently included in our list of the 10 High Yield Crude Oil Stocks to Buy After Trump’s Blitz in Venezuela.
