Oil Companies Enter 2027 With Their Strongest Balance Sheets in Years. Here's What to Expect Next Year.
In 2020, when oil prices plunged, leverage in the oil sector increased; today, amid high oil prices, the story is completely different.
Overview
Oil is a volatile commodity, a fact you have to accept if you are going to buy an energy stock like Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), Devon Energy (NYSE: DVN), or Diamondback Energy (NASDAQ: FANG). However, oil volatility can be both a negative and a positive. Right now, high oil prices are helping to strengthen energy company balance sheets. Here's what that means for investors in 2027.
In 2020, during the coronavirus pandemic, oil prices cratered amid the economic shutdown used to slow the spread of the illness. It was a difficult time for the world, but energy companies were particularly hard hit. At one point, oil prices in the United States fell below zero. There were technical reasons for the brief and shocking decline, but it shows just how difficult a period it was for energy companies.
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Originally published at www.fool.com.