Energy stocks and oil prices have moved in the same direction in 2026, but not by the same amount. West Texas Intermediate crude closed at $101.44 a barrel on September 18, 2026, up 77% from $57.26 at the end of 2025 [1]. Over a similar stretch the Energy Select Sector SPDR Fund (XLE) gained 48% through September 9, with Chevron (CVX) up 44% and ExxonMobil (XOM) up 40% [5]. The stocks captured roughly two-thirds of the commodity's move, which is what history suggests when investors expect the price spike to fade: the U.S. Energy Information Administration projects Brent falling to about $74 a barrel in 2027 [2]. Producers are being valued on the cash they generate at a normalized price, not at today's spot.
How oil prices moved in 2026
The year has had three distinct phases. WTI rose from $57.26 on December 31, 2025 to $102.86 on March 31, 2026, a gain of 80% in one quarter, after supply disruptions in the Middle East cut shipments through the region [1]. The front-month futures contract tracked on DataPorium reached an intraday high of $119.48 on March 9 [6]. Prices then fell 31% in the second quarter to $70.56 on June 30 as inventories were drawn down and demand adjusted [1]. The third quarter reversed again: WTI climbed to $103.21 on September 17 before easing to $101.44 on September 18 [1]. Futures data show the same path, with the front-month contract at $68.58 on June 30, $80.34 on July 31, $90.22 on August 31 and $95.78 on September 18 [6].
EIA's September outlook, released September 9, attributes the renewed rise to falling global oil inventories, which it estimates have declined by about 400 million barrels so far this year, and it expects prices to stay elevated through the end of 2026 before production recovers and inventories rebuild [2]. Its forecast has Brent averaging around $91 a barrel in the second half of 2026 and $74 in 2027, with U.S. crude production rising from 13.8 million barrels a day in 2026 to 14.3 million in 2027 [2]. That forward path, high now and lower later, is the key to how the stocks have traded.
Why energy stocks captured only part of the oil rally
Stocks price the strip, not the spot
An oil producer's value is the present value of its future cash flows, and futures markets in a supply shock typically price later deliveries far below the front month. If the market expects $74 oil in 2027, as EIA does [2], then a stock will not double just because spot oil did. The 48% gain in XLE against a 77% gain in WTI is consistent with investors paying for a year or two of windfall cash flow and then a return to a normal price [1][5]. In the second quarter, when spot fell 31%, the stocks held up much better for the same reason: the longer-dated expectation had not moved as far.
Cash flow, buybacks and debt reduction
What the producers did with the windfall matters as much as its size. ExxonMobil earned $14.5 billion in the second quarter, or $3.48 per share ($3.52 adjusted), up from $8.8 billion of adjusted earnings in the first quarter, and generated $23.6 billion of operating cash flow and $17.2 billion of free cash flow [3]. It distributed $9.4 billion to shareholders, $4.3 billion in dividends and $5.1 billion in buybacks, while spending $13.0 billion on capital projects in the first half, and its Permian production exceeded 1.8 million oil-equivalent barrels a day [3]. Chevron earned $12.1 billion, or $6.11 per share, against $2.5 billion a year earlier, with $22.6 billion of operating cash flow and $18.1 billion of free cash flow; it paid $3.5 billion in dividends, bought back $3.1 billion of stock and cut total debt by a record $8.4 billion, bringing its net debt ratio to 13.1% [4]. Chevron's worldwide production rose 20% to 4.07 million barrels of oil equivalent a day, and it realized $70.80 a barrel for U.S. liquids and $96.41 internationally during the quarter [4].
| Q2 2026 | ExxonMobil | Chevron |
|---|---|---|
| Earnings | $14.5 billion ($3.48 per share) | $12.1 billion ($6.11 per share) |
| Operating cash flow | $23.6 billion | $22.6 billion |
| Free cash flow | $17.2 billion | $18.1 billion |
| Dividends plus buybacks | $9.4 billion | $6.6 billion |
| Other use of cash | $13.0 billion first-half capex | $8.4 billion debt reduction |
Sources: company releases for the quarter ended June 30, 2026 [3][4]. The two companies' free cash flow of more than $35 billion in one quarter, at realized prices well below the September spot level, shows why the stocks did not need spot oil to stay above $100 to justify their gains.
Valuation of the energy sector in September 2026
The sector has become cheaper on trailing earnings even as prices rose, because earnings rose faster. DataPorium's Energy sector P/E series for Nasdaq-listed companies fell from 16.7 on June 26 to 15.3 on September 18, 2026, the lowest of the eleven sectors and about a third of the 45.7 multiple for Technology on the same date [6]. Daily moves still track crude closely: Nasdaq-listed energy names rose 2.1% on average on September 17 as WTI hit $103.21, and fell 1.6% on September 18 as it slipped to $101.44 [1][6]. Readers can follow both series on DataPorium's commodities page and stock market page [6].
A mid-teens multiple on peak-cycle earnings is what the market pays when it expects the cycle to turn, and EIA's 2027 forecast says it will [2]. The question for investors is whether the normalization comes as slowly as the forecast implies. Points investors may consider:
- WTI is up 77% in 2026 while XLE is up 48%, a ratio consistent with the market pricing a return toward $74 oil in 2027 [1][2][5].
- ExxonMobil and Chevron generated more than $35 billion of combined free cash flow in one quarter and returned $16 billion to shareholders [3][4].
- Chevron's 20% production growth and $8.4 billion debt reduction mean its earnings power at $74 oil is higher than it was at the last cycle peak [4].
- The energy sector trades at a trailing P/E of 15.3, the lowest of any sector, which prices in falling earnings [6].
Energy stocks rose with oil in 2026 but captured only about two-thirds of the move, because investors are valuing producers on the cash they generate at the $74 oil EIA expects for 2027 rather than at the $101 spot price of mid-September.
Key takeaways
- WTI closed at $101.44 on September 18, 2026, up 77% for the year after an 80% first-quarter surge, a 31% second-quarter drop and a 44% third-quarter rebound [1].
- XLE gained 48% through September 9, with Chevron up 44% and ExxonMobil up 40% [5].
- EIA expects Brent to average about $91 in the second half of 2026 and $74 in 2027, with global inventories down about 400 million barrels this year [2].
- ExxonMobil earned $14.5 billion and Chevron $12.1 billion in Q2 2026, with combined free cash flow above $35 billion [3][4].
- The Energy sector P/E fell to 15.3 on September 18, the lowest of the eleven sectors [6].
Frequently asked questions
Why have energy stocks gone up less than oil prices in 2026?
Stocks are valued on expected future cash flows, and EIA forecasts Brent falling to about $74 a barrel in 2027, so investors have paid for a temporary windfall rather than a permanent price level; XLE gained 48% while WTI rose 77% [1][2][5].
What is the price of WTI crude oil in September 2026?
WTI closed at $101.44 a barrel on September 18, 2026, after reaching $103.21 on September 17, according to EIA data published by FRED [1].
How much free cash flow did Exxon and Chevron make in Q2 2026?
ExxonMobil generated $17.2 billion of free cash flow and Chevron $18.1 billion in the quarter ended June 30, 2026, together more than $35 billion [3][4].
What does EIA forecast for oil prices in 2027?
EIA's September 2026 outlook projects Brent averaging about $74 a barrel in 2027, down from about $91 in the second half of 2026, as production recovers and inventories rebuild [2].
Sources & References
- [1] Crude Oil Prices: West Texas Intermediate (DCOILWTICO), FRED, Federal Reserve Bank of St. Louis
- [2] U.S. Energy Information Administration, Short-Term Energy Outlook, September 2026 (released September 9, 2026)
- [3] ExxonMobil Announces Second-Quarter 2026 Results (July 31, 2026)
- [4] Chevron Reports Second Quarter 2026 Results (SEC Form 8-K exhibit, July 31, 2026)
- [5] 24/7 Wall St.: ExxonMobil Is Up 40% in 2026 (September 9, 2026)
- [6] DataPorium Commodities and Stock Market Analytics (WTI futures history and Energy sector P/E)
