Bob Brackett — Why Energy Stocks Are Down When They Should Be Up

Exxon is the giant oil company that does everything — pumps oil out of the ground, ships it through pipelines, refines it into gasoline and diesel, and sells it. Because it also owns a lot of refineries, it's steadier than a pure oil driller: when oil prices fall, the price of gasoline and diesel falls more slowly, so the refining side actually earns wider profit margins and cushions the drop.

It's his top pick among the big oil companies right now — the "buy it and forget it" default for an ordinary investor. It's superbly managed (it earns a solid return on the money it invests and reliably hands back roughly 3% a year in dividends plus stock buybacks), and at $60 oil — below the long-run average of about $75 — the odds favor the price drifting back up over time. As he puts it, "park in Exxon, I've got time to make money."

EQT is one of America's biggest pure natural-gas producers. The investment idea is simple: electricity demand in the US is finally growing again (3–4% a year, driven by AI data centers), and the fastest way to make more power right now is to burn more natural gas. So owning a clean, gas-only producer is a direct bet on rising gas demand.

For years gas drillers destroyed money chasing growth. Now they've been forced into discipline — spending less, returning cash to shareholders — which finally lets a company like EQT earn a decent profit through the ups and downs of the price cycle. It's one of two large pure-play gas names he says "rise to the top."

Expand Energy produces more natural gas in the US than anyone — more than even Exxon or Chevron. It does one thing, and that's drill and sell gas, which makes it the cleanest, most direct way to bet on natural gas prices going up as AI-driven power demand climbs.

It's the other of his two favorite large gas-only names. Same logic as EQT: a focused producer that benefits straightforwardly from higher gas prices, now run with the spending discipline the industry lacked for years.

Diamondback is his favorite of the oil drillers. It became the dominant operator in one prime patch of West Texas (the Midland Basin) by buying up its neighbors, and it owns a side business, Venom, that collects royalty checks on land others drill. Everything is in Texas — Texas wells, Texas pipelines, Texas customers — so there's essentially no risk from overseas politics or from gambling on expensive exploration.

He prefers it over the higher-quality-but-pricier EOG simply on value: Diamondback took on some debt to do its acquisitions, so the stock is cheaper. And because it's a tidy, single-basin operator, it's exactly the kind of company a big oil major eventually buys out — a likely payday down the road.

EOG is widely seen as the best-run of the US oil drillers — the early pioneer of using fracking to get oil (not just gas) out of shale rock, spread across about a dozen different drilling regions. He calls it "a great company."

The catch: it's so obviously excellent that the stock is usually expensive, which is why he leans toward the cheaper Diamondback instead. And because EOG is spread across so many areas and runs in a nimble, decentralized way, a big lumbering major can't easily absorb it and improve it — so unlike Diamondback, it's not really a takeover target.

Cheniere runs two enormous facilities (in Louisiana and Texas) that chill natural gas into liquid so it can be loaded onto ships and sold overseas — think of them as the world's biggest refrigerators. It runs a toll-booth business: it locks in roughly 95% of its capacity under long contracts (around 17 years on average) where customers must pay whether they take the gas or not. It buys gas off the US grid, liquefies it, and books its fee at the dock — so it carries almost no exposure to swings in gas prices or to overseas politics.

This is the one genuine growth story in his whole coverage. He's convinced it will join the S&P 500 this year, and it generates cash worth about 8% of its stock price annually versus the roughly 5% similar pipeline companies trade at — meaning it's cheaper than peers for what he considers the safest, most reliable return in the group.

Freeport is the big US copper miner — it calls itself "America's copper champion." It runs the world's second-largest copper mine in Indonesia, holds large copper deposits inside the US, and has an extra kicker if tariffs push up the US copper price. If you believe copper is going higher, it's the obvious large-company way to play it.

He's a copper bull — admittedly a "lone voice" — because new copper is genuinely hard to come by: existing mines are slowly depleting, there's no cheap new technology to unlock more (you can't frack for copper), and demand keeps rising from electric cars, wind and solar, and the power grid. One caveat on timing: tariff fears have caused the US to hoard copper, artificially propping up the price for now, so he stresses that buying at the right entry point matters.

Chevron is a top-tier major oil company, cut from the same cloth as Exxon — excellently run, earning a strong return on its capital, and paying a rock-solid roughly 3% dividend it kept up even through the COVID oil crash when prices briefly went negative.

He has nothing negative to say about it; he simply prefers Exxon right now because Exxon leans more on refining, which makes it a bit steadier and more defensive in a falling-oil environment.

ConocoPhillips is grouped with the well-run American oil majors that, unlike their European counterparts, never cut their dividends even during COVID's negative oil prices — a sign of financial strength. It's also a serial acquirer (it bought Concho Resources).

He lumps it in the "same vein" as Exxon and Chevron as a quality name, but doesn't single it out as his current top choice — that's Exxon.

Devon is his go-to example of a typical US shale driller. Its lineage traces to Mitchell Energy, the company that first figured out how to frack natural gas. Because every US well is public record, hedge funds can model these drillers well-by-well — which is one reason he's cautious about being an everyday investor's "exit liquidity" in them.

Today's Devon is the disciplined, "well-behaved and kind of boring" model: it returns most of its cash to shareholders and throws off cash worth about 6–7% of the stock price a year. Solid, but used as an illustration of the category rather than singled out as a buy.

Venture Global is the other US company that chills natural gas into liquid for export by ship — the same toll-booth, pay-whether-you-take-it-or-not contract model as Cheniere.

It's newer to the business than Cheniere, and he mentions it without the same conviction — Cheniere is the name he singles out as the standout in this niche.

GE Vernova makes the gas turbines that power plants use to turn natural gas into electricity. It's one of only three companies in the world that build them, so as AI data centers drive a surge in power demand, it sits at a genuine bottleneck — which is why the stock, in the host's words, "has gone insane."

It comes up as the headline example of "long whatever AI needs" — owning the picks-and-shovels of the power buildout. He cites it to illustrate the theme rather than formally rating it.

Shell is a big European integrated oil company. He points to it as one of the Europeans that cut their dividend during COVID — his shorthand for being less financially battle-tested than the US majors, which held theirs.

It's also the type of large buyer that signs long-term contracts to take cargoes off Cheniere. Mentioned as a contrast and a customer rather than a recommendation.

BP is another European oil major he lists (alongside Shell, Total, Repsol, and Eni) as having cut its dividend during COVID.

That dividend cut is his factual marker that these European companies are simply less robustly run than the American majors like Exxon and Chevron. Named as an example, not a pick.

TotalEnergies is one more European integrated oil company cited for cutting its dividend during COVID — the Europeans, as he puts it, "weren't built for it."

It's part of the contrast he draws to show how much more financially resilient the US majors are. A reference point, not a recommendation.

Repsol, the Spanish oil major, is named in the same breath as the other European integrateds that cut dividends during COVID.

Like the others, it serves as an example of the less financially resilient European group rather than a stock he's endorsing.

Eni, the Italian oil major, is the last of the European integrateds he names for cutting its dividend during COVID — the same "not built for it" point.

Cited to round out the contrast with the dividend-protecting American majors, not as a recommendation.

Equinor, the Norwegian oil company, comes up in his discussion of lithium — the metal used in EV batteries. He notes that oil companies like Equinor (and Exxon) can drill wells to pump up underground salty water (brine) and extract lithium from it.

His point is a warning, not a buy: this could become a cheap, high-volume new source of lithium that "should scare lithium investors" by flooding what is today a tiny, very volatile market.