How to Find the Best Oil Stocks to Buy
Higher demand and lower inventories should help the top-rated oil stocks outperform.


Oil stocks as a group have been market laggards since the S&P 500 bottomed out late last year. If there's any solace to be found, it's that analysts say rising demand and lower inventories should help the top-rated oil stocks outperform in the second half of 2024 and beyond.
Oil stocks are underperforming for a bunch of reasons, but an underappreciated factor might be that the majority of the bull market's gains have been driven by the Magnificent 7 stocks and excitement over all things AI.
But slower economic growth, a softening jobs market and the cumulative effect of years of above-average inflation have also been a weight on the sector. Happily, concerns about the state of consumer spending appear to have been overblown.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Many U.S. consumers have indeed faced weakening finances in 2024, but their demand for crude oil products has proved resilient," write Wells Fargo Investment Institute analysts Mason Mendez and John Laforge. "After a soft start to the 2024 driving season, U.S. crude oil demand has improved and is now in-line with its typically strong seasonal pattern."
Indeed, the U.S. four-week consumption average hit its highest point of the year in late June, the analysts add. At the same time, U.S. airport travel activity notched a record high of 2.82 million passengers per day in the final week of June.
The improving backdrop for demand has helped the S&P 500's energy sector close some of its performance gap with the broader market midway through the year, but it still has catching up to do. For the year to date through mid-July, the S&P 500 was up 17% on a price basis. The energy sector of the S&P 500 trailed the broader S&P 500 by about 5 percentage points.
How to find the best oil stocks
In order to find the best oil stocks to buy now, we started by screening the S&P 500's oil & gas sector for Wall Street analysts' top-rated names.
Here's how the ratings process works: S&P Global Market Intelligence surveys analysts' stock ratings and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.5 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call. In other words, lower scores are better than higher scores.
We further limited ourselves to stocks with more than 10 Strong Buy recommendations (in order to ensure adequate analyst coverage and sample size). Lastly, we dug into research, fundamental factors, valuation, analysts' estimates and other data on the top names.
Our screen served up both familiar names and smaller players. Have a look at the table below to see Wall Street's best oil stocks to buy now.
Company | Ticker | Analysts' Consensus Recommendation Score | Analysts' Consensus Recommendation |
---|---|---|---|
SLB | SLB | 1.45 | Strong Buy |
Targa Resources | TRGP | 1.48 | Strong Buy |
Halliburton | HAL | 1.61 | Buy |
Diamondback Energy | FANG | 1.68 | Buy |
Baker Hughes | BKR | 1.70 | Buy |
ConocoPhillips | COP | 1.78 | Buy |
Related Content
- How to Find the Best Small-Cap Stocks to Buy
- Best Dividend Stocks to Buy for Dependable Dividend Growth
- Analysts' Top S&P 500 Stocks to Buy Now
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.
A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about markets and macroeconomics.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.
-
The Surprising Truth About Loneliness and Longevity
We've all heard about the epidemic of loneliness that can shorten lives and make retirement miserable. But there's more to the story.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?
The Dollar Index Is Sliding. Is Your Portfolio Prepared? The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?
The Dollar Index Is Sliding. Is Your Portfolio Prepared? The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
Seven Financial Considerations When Downsizing for Retirement
With prices going up on everything, you may be looking for a cheaper place to live. To truly evaluate costs, take a hard look at taxes and intangibles.
-
I Have Plenty of Money: Why Do I Need a Long-Term Care Plan?
Long-term care planning, whether through insurance or self-funding, is crucial not only for financial protection but also to preserve family relationships and reduce the emotional and logistical burdens on loved ones.
-
The GENIUS, CLARITY, and Anti-CBDC Acts: What Bitcoin Investors Need to Know
Movement on the crypto front at the federal level has the potential to usher in substantial change. Here's what it means for your portfolio.
-
Wellness Stocks to Invest in Now
Breakthroughs that help us live longer, healthier lives can also create opportunities for investors.
-
Three Steps for Evaluating a Downsize in Retirement: A Financial Planner's Guide
Unless you think things through, you could end up with major (and costly) regrets. To make the right choice, base it on the three keys to retirement happiness.
-
Worried About Your Retirement Income? Four Questions to Ask Yourself, From a Financial Planner
If you're nearing or in retirement and stressing about your retirement income (so many of us are), consider taking some time to think about these four issues.
-
Stock Market Today: Stocks Step Back From New Highs
Investors, traders and speculators continue the low-volume summer grind against now-familiar uncertainties.