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.
12. Ovintiv Inc. (NYSE:OVV)
Number of Hedge Fund Holders: 59
Ovintiv Inc. (NYSE:OVV) is one of the largest producers of oil and natural gas in North America, with a focused portfolio in the US and Canada.
On May 26, Barclays analyst Betty Jiang raised the firm’s price target on Ovintiv Inc. (NYSE:OVV) from $68 to $75, while maintaining an ‘Overweight’ rating on the shares. The target boost reflects an upside of almost 34% from the current price level.
Barclays believes that the depleting inventories, reduced spare capacity within OPEC, and a “muted” US supply response to the Middle East disruptions are contributing to a tighter oil macro environment that is not yet fully reflected in energy stocks’ valuations. According to the analyst firm, this could lead to a re-rating of the “oily” exploration and production operators once the conflict is over.
Barclays also lowered its gas price outlook due to oversupply issues in the near-term and updated its ratings and price targets in the integrated oil and E&P group.
11. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 64
Phillips 66 (NYSE:PSX) is a diversified and integrated downstream energy provider that manufactures, transports, and markets products.
On May 27, Mizuho analyst Nitin Kumar upgraded Phillips 66 (NYSE:PSX) from ‘Neutral’ to ‘Outperform’, while also raising the firm’s price target on the stock from $170 to $212. The revised target indicates an upside of more than 20% from the current price level.
The upgrade was driven by Phillips 66’s improving refining operations, successful execution of strategic initiatives, and greater exposure to the rising refining and chemicals margins. Moreover, Mizuho cited the company’s “enhanced” earnings outlook for the price target boost.
Phillips 66 (NYSE:PSX) delivered a surprise adjusted profit of $0.49 per share and topped estimates by $0.88 in its Q1 2026 report last month. The strong performance was driven by a sharp rise in refining margins and higher capacity utilization, which helped the company offset the impact of volatile commodity prices. US refining margins, measured by the 3-2-1 crack spread, surged by around 73% YoY on average during the first quarter.
Oakmark Select Fund stated the following regarding Phillips 66 (NYSE:PSX) in its Q1 2026 investor letter:
“Phillips 66 (NYSE:PSX) was the top contributor during the quarter. The U.S.-headquartered downstream energy company’s stock price rose as it benefited from higher crack spreads (the difference in price between crude oil and refined petroleum), heightened geopolitical risk and solid fourth-quarter 2025 earnings. Fundamental results have been encouraging, and we believe PSX is set to be a major beneficiary of rising crack spreads. We continue to see PSX as a durably advantaged energy company focused on returning cash flow to shareholders.”
10. Valero Energy Corporation (NYSE:VLO)
Number of Hedge Fund Holders: 67
Next on our list of the Best Oil and Gas Stocks is Valero Energy Corporation (NYSE:VLO). It is the world’s premier independent petroleum refiner and a leading producer of low-carbon transportation fuels.
On May 27, Mizuho significantly bumped up its price target on Valero Energy Corporation (NYSE:VLO) from $222 to $289, but kept a ‘Neutral’ rating on the shares. The revised target reflects an upside of 18% from the current levels.
Mizuho expects the Iran war to have a lasting impact on global oil prices and refining cracks. As a result, the firm raised its oil price outlook for 2026 and 2027 by 25% and 6%, respectively.
According to Mizuho, a pullback in energy stock valuations, despite the strong commodity prices, presents an opportunity for investors to seek “alpha” within the US oil sector. The analyst firm revised its ratings and price targets across the group.
Valero Energy Corporation (NYSE:VLO) comfortably exceeded expectations in its Q1 2026 report last month, driven by the strength in its refining segment, margins, and throughput volumes. As a result, VLO was included in our list of the 10 Energy Stocks That Crushed Earnings Estimates in the First Quarter.
9. Baker Hughes Company (NASDAQ:BKR)
Number of Hedge Fund Holders: 72
Baker Hughes Company (NASDAQ:BKR) is an energy technology company that provides solutions for energy and industrial customers worldwide.
Baker Hughes Company (NASDAQ:BKR) announced on May 28 that it had secured two contract extensions with Equinor to provide integrated drilling and well services solutions, as well as wireline intervention services. The multi-year extensions will support the Norwegian energy giant’s offshore production operations in the North Sea. The financial terms of the deal were not disclosed.
Amerino Gatti, Executive Vice President of Oilfield Services & Equipment at Baker Hughes Company (NASDAQ:BKR), commented:
“Baker Hughes’ ability to provide holistic solutions that unlock incremental value for our customers has been proven through decades of operation in the North Sea. From greenfield well construction operations to interventions that extend the life of mature fields, our innovative technologies and ability to integrate our services can help create a more secure energy future for Norway and all of Europe. We look forward to being part of this new chapter of collaboration with Equinor.”
This builds on the earlier May 26 announcement by Baker Hughes Company (NASDAQ:BKR) that it had secured a “major” contract extension with Brazil’s Petrobras to provide integrated solutions for well construction across the South American country’s offshore Santos Basin. This agreement builds on a well construction services award announced in early 2024, further solidifying the position of the energy technology company in the region.
8. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 74
Cheniere Energy, Inc. (NYSE:LNG) is the largest producer of liquefied natural gas in the United States and the second-largest LNG operator in the world.
Cheniere Energy, Inc. (NYSE:LNG) announced on May 28 that it had signed a contract with Bechtel Corp for engineering, procurement, and construction of phase one of its Sabine Pass LNG expansion project in Louisiana. The contract is valued at $4.69 billion and includes a single train, Train 7, a boil-off gas re-liquefaction unit, along with supporting infrastructure and tie-ins to the existing Sabine Pass LNG terminal.
Phase one has an expected total production capacity of over 6 mtpa of LNG. Cheniere revealed that it expects to reach a final investment decision on the first phase by early 2027. Notably, the company also gave Bechtel a “limited notice to proceed”, allowing early engineering and procurement work to begin.
The SPL Expansion Project is being executed in a phased manner and is designed to add up to 3 “large-scale” liquefaction trains with a combined capacity of about 20 mtpa to the existing terminal.
Jack Fusco, Chairman, President, and CEO of Cheniere, commented:
“We are pleased to once again partner with Bechtel on the first phase of the SPL Expansion Project, and we look forward to building upon the unmatched track record for execution excellence the Cheniere and Bechtel relationship has established while successfully building our leading LNG platform. The EPC contract and the issuance of LNTP mark important steps toward FID, which we expect to occur by early next year. We are excited to have the project underway and are laser-focused on the remaining steps required to reach FID. The SPL Expansion Project commences as LNG market dynamics highlight the criticality of secure supply in the global energy system. We look forward to bringing this much-needed LNG capacity to the market and providing our customers with reliable and flexible LNG from Train 7.”
7. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 74
Next on our list of the Best Oil and Gas Stocks is ConocoPhillips (NYSE:COP). It is one of the world’s largest independent E&P companies based on oil and natural gas production and proved reserves.
On May 27, Mizuho bumped up its price target on ConocoPhillips (NYSE:COP) from $136 to $150, while maintaining an ‘Outperform’ rating on the shares. The revised target represents an upside of almost 32% from the current price level.
Mizuho expects the US-Iran war to have a lasting impact on the global oil prices and refining margins. As a result, the company raised its oil price forecast for this year and the next by 25% and 6%, respectively. Similarly, the firm also significantly increased its outlook for US refining cracks by 61% and 51%.
Mizuho believes that a drop in energy stock valuations, despite the high commodity prices, would give investors a chance to seek “alpha” within the US oil and gas sector. The analyst firm revised its ratings and price targets across the group.
Similarly, earlier on May 22, Morgan Stanley also boosted its price target on ConocoPhillips (NYSE:COP) by $4, while keeping its ‘Overweight’ rating (read more details here).
6. Antero Resources Corporation (NYSE:AR)
Number of Hedge Fund Holders: 75
Antero Resources Corporation (NYSE:AR) is an independent natural gas and liquids company operating in the Appalachian Basin. It is one of the largest American suppliers of natural gas and LPG to the global export market.
On May 27, Mizuho bumped up its price target on Antero Resources Corporation (NYSE:AR) from $50 to $54, while maintaining an ‘Outperform’ rating on the shares. The target revision represents an upside potential of over 51% from the current share price.
Mizuho expects the global oil prices and refining margins to witness a prolonged impact from the Middle East conflict. As a result, the company lifted its oil price forecast for 2026 and 2027 by 25% and 6%, respectively. Moreover, it also raised its outlook for US refining cracks by 61% and 51%.
The analyst firm believes that a potential pullback in energy stock valuation, despite the high commodity prices, would create an opportunity for investors to seek “alpha” within the US oil sector. Mizuho updated its ratings and price targets across the group.
Aristotle Capital Management, LLC, an investment management company, stated the following regarding Antero Resources Corporation (NYSE:AR) in its Q1 2026 investor letter:
“Antero Resources Corporation (NYSE:AR) contributed to performance in the first quarter due to higher price levels for U.S. natural gas caused by cold winter weather temperatures, as well as increasing demand from AI data center power needs. Late in the quarter, Antero also benefited from a geopolitically driven natural gas price spike as Middle East supply disruptions pushed global liquified natural gas (LNG) buyers toward U.S. LNG cargoes. The company continues to demonstrate strong fundamentals, with strong free cash flow generation and a de-levered balance sheet.”
5. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 78
Occidental Petroleum Corporation (NYSE:OXY) is an international energy company that produces, markets, and transports oil and natural gas.
On May 26, Barclays upgraded Occidental Petroleum Corporation (NYSE:OXY) from ‘Equal Weight’ to ‘Overweight’, while also raising its price target on the stock from $59 to $72. The target boost reflects an upside of over 27% from the current levels.
Occidental’s principal debt stood at $13.3 billion at the end of the first quarter, and the company has a near-term target to reduce it to $10 billion. According to Barclays, the soaring oil prices amid the Middle East crisis should allow the company to achieve its debt goals and fully pre-fund its Berkshire preferred equity obligations by the second half of 2027. The analyst firm believes that as concerns over leverage fade, investors should shift their focus on Occidental’s “top-tier” resource portfolio and improved capital efficiency.
Occidental Petroleum Corporation (NYSE:OXY) was also recently included in our list of the 10 Best Value Stocks to Buy in 2026 According to Warren Buffett.
4. Expand Energy Corporation (NASDAQ:EXE)
Number of Hedge Fund Holders: 81
Formed in 2024 by the merger of Chesapeake Energy Corporation and Southwestern Energy Company, Expand Energy Corporation (NASDAQ:EXE) operates as an independent natural gas production company in the United States.
On May 26, Barclays analyst Betty Jiang downgraded Expand Energy Corporation (NASDAQ:EXE) from ‘Overweight’ to ‘Equal Weight’, while also trimming the firm’s price target on the stock from $127 to $110. The lowered target still indicates an upside of over 18% from the current levels.
According to Barclays, the downgrade was driven by its reduced outlook for natural gas, as well as the “less visible path” for near-term catalysts for expansion. The analyst highlighted that the company’s value creation is increasingly reliant on gas marketing and commercial optimization, which increases its exposure to market conditions and timing.
Expand Energy Corporation (NASDAQ:EXE) exceeded Wall Street estimates in its Q1 2026 report in April, driven primarily by the higher natural gas prices during Winter Storm Fern. The company reaffirmed its full-year 2026 target to deliver 7.5 Bcf a day of natural gas at $2.85 billion of CapEx.
3. The Williams Companies, Inc. (NYSE:WMB)
Number of Hedge Fund Holders: 84
The Williams Companies, Inc. (NYSE:WMB) operates as an energy infrastructure company primarily in the United States, handling approximately one-third of the natural gas in the country.
On May 29, Argus upped the firm’s price target on The Williams Companies, Inc. (NYSE:WMB) from $83 to $85, while maintaining a ‘Buy’ rating on the shares. The target boost represents an upside of 19% from the current price level.
The Williams Companies, Inc. (NYSE:WMB) delivered a 22% YoY growth in adjusted EPS and 13% rise in adjusted EBITDA in its Q1 2026 report on May 4. Argus highlighted that the surge in earnings was driven by the strength in the company’s Transmission, Power, and Gulf segment, supported by the higher net rates and expansion projects at Transco and new Gulf volumes. Transco grew about 10% YoY during the quarter.
The analyst firm also noted Williams’ strong dividend history. The company has paid a common stock dividend every quarter since 1974 and currently boasts a robust annual dividend yield of 2.94%. Argus added that it considers the payout safe and sustainable in the current energy backdrop.
Carillon Tower Advisers, an investment management company, stated the following regarding The Williams Companies, Inc. (NYSE:WMB) in its Q1 2026 investor letter:
“The Williams Companies, Inc. (NYSE:WMB) shares benefitted from the conflict in the Middle East, which sent commodity prices of crude oil and natural gas to multi-year highs. We estimate that 10% to 15% of total supply could be removed from the global market for an extended period. Williams has limited commodity exposure, but the company should benefit from higher volumes moving through its vast pipeline system. The US natural gas market is incrementally viewed across the world as the most secure source. Williams is well placed to benefit from any improved volumes in the liquefied natural gas (LNG) export market.”
2. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 94
Exxon Mobil Corporation (NYSE:XOM) is one of the largest integrated fuels, lubricants, and chemical companies in the world.
On May 27, Mizuho hiked its price target on Exxon Mobil Corporation (NYSE:XOM) from $159 to $175, but maintained its ‘Neutral’ rating on the shares. The target boost indicates an upside of 24% from the current share price.
According to Mizuho, the Middle East conflict can have a prolonged impact on the global oil prices and refining margins. As a result, it raised its oil price outlook for 2026 and 2027 by 25% and 6%, respectively. The firm also increased its forecast for US refining cracks by 61% and 51%.
Similarly, earlier on May 26, Barclays analyst Betty Jiang also lifted the firm’s price target on Exxon Mobil Corporation (NYSE:XOM) from $163 to $182, while keeping an ‘Overweight’ rating on the shares. The revision comes after the firm adjusted its rating and price targets across the integrated oil and E&P group.
With an impressive annual dividend yield of 2.84%, Exxon Mobil Corporation (NYSE:XOM) was also recently included in our list of the 12 Best Blue Chip Dividend Stocks to Buy Now.
1. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 103
Topping our list of the Best Oil and Gas Stocks is Chevron Corporation (NYSE:CVX). The company manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives.
Chevron Corporation (NYSE:CVX) has received significant positive attention from analysts over the last week. On May 27, Mizuho analyst Nitin Kumar raised the firm’s price target on the stock from $225 to $230, while maintaining an ‘Outperform’ rating on the shares. The revised target, which reflects an upside of 26% from the current levels, comes after the analyst firm raised its outlook on global oil prices and US refining margins amid the Middle East crisis.
Similarly, earlier on May 26, Barclays also upped its price target on Chevron Corporation (NYSE:CVX) from $192 to $213, but kept an ‘Equal Weight’ rating on the shares. The analyst firm believes that the depleting inventories, shrinking spare capacity within OPEC, and a “muted” US supply response to the Middle East disruptions are contributing to a tighter oil macro environment that is not yet fully reflected in the valuations of energy stocks.
Lastly, on May 22, Morgan Stanley also boosted its price target on Chevron Corporation (NYSE:CVX) by $2, while keeping its ‘Overweight’ rating (read more details here).
READ NEXT: 15 Best Nuclear Power Stocks to Buy According to Wall Street Analysts and 12 Best LNG Stocks to Buy in 2026
Disclosure: None. Follow Insider Monkey on Google News.
