In this article, we are going to discuss the 14 best oil and gas stocks to buy according to hedge funds.
As of the writing of this piece, the S&P Energy index has surged by 21.84% since the beginning of 2026, comfortably outperforming the 10.52% gains delivered by the overall S&P 500 during the period.
Energy was the dominant sector in the first quarter, driven primarily by the soaring oil prices amid the Middle East crisis. The disruptions also caused a massive spike in refining crack spreads, causing the US refining margins to soar by an average of around 73% YoY during the quarter.
As a result, 38 of 40 upstream S&P 500 companies finished in positive territory in Q1, while the Big Three refiners averaged 48.6% returns. At the same time, the midstream sector was led by tanker stocks, which delivered gains of over 45%.
This momentum is expected to continue as analysts expect the high oil prices to remain firm also in the coming months. Even if the war heads towards a resolution, it will take quite some time for the trade flows through the Strait of Hormuz to reach pre-crisis levels. As a result, a Reuters survey of 33 economists and analysts on May 29 projected Brent crude to average $90.44 per barrel in 2026. This is up from the forecasts of $86.38 per barrel last month.
With that said, here are the Best Oil and Gas Stocks to Buy Now.
Our Methodology
To collect data for this article, we referred to several stock screeners to find the major companies operating in the oil and gas sector. We then ranked these stocks by the number of hedge funds invested in them at the end of Q1 2026, as per the Insider Monkey database. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. The following are the Best Oil and Gas Stocks to Buy 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
14. Energy Transfer LP (NYSE:ET)
Number of Hedge Fund Holders: 34
Energy Transfer LP (NYSE:ET) is one of the largest and most diversified midstream energy companies in North America, with a strategic footprint in all of the major US production basins.
On May 27, Morgan Stanley boosted its price target on Energy Transfer LP (NYSE:ET) from $21 to $23, while keeping an ‘Equal Weight’ rating on the shares. The revised target reflects an upside potential of over 20% from the current share price.
Similarly, earlier on May 13, BofA also bumped up its price target on Energy Transfer LP (NYSE:ET) by $2, while maintaining its ‘Buy’ rating (read more details here).
The bullish sentiment comes despite Energy Transfer LP (NYSE:ET) falling behind profit estimates in its Q1 report earlier this month. However, the company’s revenue surged by over 32% YoY and exceeded expectations. Moreover, its DCF attributable to partners and adjusted EBITDA also surged by 17% and 20% compared to last year, respectively.
Notably, Energy Transfer LP (NYSE:ET) raised its guidance for the full-year 2026. The midstream operator now expects its adjusted EBITDA for the year to range between approximately $18.2 billion and $18.6 billion, up from its previous range of around $17.45 billion and $17.85 billion. Moreover, the company now expects its 2026 organic growth capital guidance to be between approximately $5.5 billion and $5.9 billion, compared to its prior range of $5 billion to $5.5 billion.
13. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 58
Devon Energy Corporation (NYSE:DVN) is a leading US oil and gas producer with a premier multi-basin portfolio touching the Anadarko Basin, Eagle Ford, Marcellus Shale, Powder River Basin, Williston Basin, and anchored by a world-class acreage position in the Delaware Basin.
A Reuters report revealed on May 30 that Devon Energy Corporation (NYSE:DVN) has received a nearly $8 billion offer from money manager Stone Ridge Asset Management for its Marcellus shale assets in Pennsylvania. However, the report clarified that the energy firm has not yet made any decisions on the future of the natural gas-focused position, which previously belonged to Coterra. Moreover, there is no guarantee that the aforementioned offer would lead to a sale.
Devon Energy Corporation (NYSE:DVN) completed its $58 billion merger with Coterra Energy earlier this month. The combined company is one of the largest independent oil and gas producers in the country, with a strong presence in the Permian basin in Texas and New Mexico.
Devon Energy Corporation (NYSE:DVN) still remains focused on expansion. The company emerged as the biggest buyer in the sale of oil and gas drilling rights on federal lands in New Mexico and Texas held by the federal government on May 20. According to a Reuters report, Devon accounted for $2.5 billion out of the record $4 billion sale.
