The oil patch, as they call it, is having a fit. Prices go up, prices go down. It’s been happening since they first poked a hole in the ground and found the black stuff. A hundred dollars a barrel, give or take. Makes you wonder what all the fuss is about, really. So it goes.
Eventually, the price will fall. It always does. That’s just physics, or greed, or both. Here’s a look at a few companies, and how they’ll likely fare when the music stops. Don’t expect a happy ending.
Devon Energy: Riding the Rollercoaster
Devon Energy (DVN +1.56%) drills for oil and gas. Simple enough. They sell what they find. They try to hedge against price swings, but mostly they’re at the mercy of the market. The stock’s been up about 33% recently. That’s what happens when oil’s high. It’s called “upstream,” which sounds fancier than it is. It means they’re digging things up.
When the oil price drops, Devon’s earnings will drop too. Investors will run for the hills. The stock will fall. It’s predictable. Like rain. Be prepared. Or don’t. It doesn’t really matter in the grand scheme of things.
Chevron: A Bit More Fortified
Chevron (CVX +0.32%) is bigger. They do more than just drill. They own pipelines, refineries, chemical plants. It’s called “integrated.” It means they’ve spread their bets around. The stock is up 22% lately, but not as much as Devon. Those other businesses – the pipelines and refineries – they don’t do so well when oil prices are high, but they soften the blow when prices fall.
Chevron also has a decent balance sheet. They don’t owe a lot of money. They can borrow more when times are tough, and pay it back when times are good. They’ve been raising their dividend for decades. That’s a sign of stability, I suppose. Or just stubbornness. So it goes.
Chevron won’t get hurt as badly when oil falls. They’re a bit more cautious. A bit more boring. The dividend is 3.6% right now, which might appeal to those who like a steady income. The best time to buy Chevron is probably when everyone else is panicking. That’s usually the case.
Enterprise Products Partners: The Toll Booth
Enterprise Products Partners (EPD 1.33%) is different. They don’t really care what oil costs. They own pipelines. They charge a fee for moving oil and gas through them. It’s like a toll booth on the information superhighway, only with more oil. The volume of oil matters more than the price. It’s remarkably simple.
They pay a large distribution to their investors. It’s been growing steadily. The distribution yield is around 5.8%. When oil prices fall, Enterprise barely notices. They just keep collecting their tolls. Even the most cautious investors might find them appealing. It’s a remarkably unglamorous business, really.
A Word to the Wise
Understand what you’re buying. If you own an upstream company, you’re betting on oil prices. An integrated company offers some protection. A midstream company is just a toll collector. It’s not rocket science. It’s just…capitalism. And capitalism, as anyone can tell you, is a sad, beautiful, and ultimately pointless endeavor. So it goes.
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2026-03-19 15:22