Can You Take the Heat in This Hated Sector? Rick Rule Can

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According to legendary resource investor Rick Rule of Rule Investment Media, a major opportunity may be opening up in the space, if you can take heat of investing in the sector "people hate": Oil and gas.

He told Lou Basenese of The Big Skinny on YouTube on November 5 that on a global basis, the oil sector is "deferring US$2 billion in sustaining capital investments every single day."

This will really affect output by 2027-2028, which means higher prices, he said.

"That's arithmetic, not narrative," Rule said. "When it begins to occur, you're going to see prices tighten up … Exxon, as an example, is selling at a 40% discount to my NPV (net present value) calculation. And I think the NPV of Exxon doubles or triples in the three- to four-year timeframe. Buying an NPV double at a 40% discount on the biggest and best oil company in the world with a 3.5% dividend, that's my idea of a good time."

According to a report by Georgia Williams for Investing News Network on December 18, oil prices weakened in 2025 as supply exceeded demand, leading to increased inventories.

"Production increases from non-OPEC producers — including record US output — and higher OPEC+ quotas have contributed to a notable supply overhang, pressuring crude toward four-year lows," Willaims wrote. "Starting the year above US$70, both Brent and WTI (West Texas Intermediate crude oil) prices have now seen steep declines of more than 20% amid signs of weaker demand in major economies like China and elevated global stocks."

Demand growth and insufficient investment are altering the future outlook for oil markets, according to the article. The oil sector is caught between the perception of plentiful supply and the reality of tightening fundamentals, Josef Schachter of the Schachter Energy Report told INN.

"Even though people are talking about lots of supply, demand is still growing," Schachter said, highlighting that global oil demand rose by roughly 1.3 million barrels per day in 2025 and is projected to increase by about 1.2 million in 2026.

New supply additions are limited, he explained. "Most basins are tired, and not enough money is being spent to bring on production," Schachter said, forecasting that global inventory drawdowns in 2026 will support higher prices.

"The real question is not if oil and gas production will increase, but by how much," Matthew Cunningham, economist and editor at FocusEconomics, told INN.

Transportation and petrochemicals are driving oil demand, according to Williams. Global oil demand is expected to rise in 2026, primarily driven by transportation fuels and petrochemical feedstocks. Gasoline is projected to lead the increase, supported by recovering air travel and road mobility, while diesel and other products will also contribute.

"Our panelists see world oil production rising 1.1% in 2026 as non-OPEC+ countries such as Guyana and the US hike output," said Cunningham.

Trouble in South America

Prices have already started rising since then as President Donald Trump has intensified a blockade on Venezuela, with U.S. forces boarding one tanker and chasing another shortly after capturing a vessel, according to a report by Grant Smith and Will Kubzansky for Bloomberg that was updated on December 22.

WTI crude reached as high as US$58 a barrel on Monday following two weeks of declines. The U.S. Coast Guard boarded the Centuries tanker in the Caribbean on Saturday, which was transporting about 2 million barrels of Venezuelan crude. This marked the first non-sanctioned vessel to be targeted. U.S. forces were also pursuing the Bella 1, which was headed to Venezuela.

Washington has been increasing pressure on Nicolás Maduro's government, with Trump aiming to cut off its primary revenue source. The U.S. has labeled the regime a foreign terrorist organization, accusing it of involvement in drug trafficking. Venezuela has denied these accusations, claiming the U.S. is after its natural resources.

Despite having the world's largest crude reserves, Venezuela's exports, primarily to China, now make up less than 1% of global demand, the Bloomberg article noted.

However, even though oil prices ticked up as the U.S. intensified its blockade on Venezuela, futures remained on track for an annual loss due to a persistent glut, the article said.

Which leads back to Rule, who told Commodity-TV in another YouTube interview published on December 5 that "if you're asking where I'm putting my own money, the most hated commodity in the world is oil and gas. And well over half of my portfolio is in oil and gas. And about 80% of my new allocations are in the oil and gas space. I love hate."

Rule said, as a society, "we've under-invested in productive capacity around the stuff of humankind (like) copper and oil for 30 years, and we aren't going to catch up in five years."

He continued, "I don't believe that you're going to see the price escalation as an example in copper that people think we are in the near term, because I think the economy is too weak for that. But if you look at five years (out), I think the nominal price of oil, the nominal price of copper, the nominal price of nickel, will make today's prices look fictional."

In another interview on YouTube with Mining Network on December 8, Rule said some "billion-dollar market cap companies, small companies" are attractive against Exxon.

"I notice that the discount in the little companies isn't materially greater than the discount on Exxon," he said. "And with Exxon, I have almost no risk and a 3. 75% dividend."

An Unprecedented Oil Boom

The military activity near Venezuela is unlikely to change expectations of a surplus, Bob McNally, president of Rapidan Energy Group, told Bloomberg.

"We've been telling clients for some time to expect crude's downward trend driven by developing, hefty surpluses to be punctuated by brief spikes on geopolitical headlines, as they have been since June," McNally said, according to the article. "But we don't expect any of these to materially disrupt oil production and flows. So, after catalyzing short covering rallies of US$1-US$2 (Israel-Iran was much bigger), prices should continue their downward grind."

Trend-following commodity advisers remain 100% short in both Brent and WTI, according to data from Bridgeton Research Group, which was recently acquired by Kpler, Bloomberg said.

At the same time, according to a report by Bruno Venditti for the site Visual Capitalist on September 16, the United States is experiencing an unprecedented oil boom. Over the past two years, the U.S. has consistently set new records in oil production, surpassing 13 million barrels of crude per day in 2024.

Texas is far ahead of other states, producing 5.7 million barrels per day in 2024, the article noted. Its well-established oilfields and extensive infrastructure in the Permian Basin provide a significant advantage. Meanwhile, New Mexico has climbed to second place, having doubled its production since 2019 due to aggressive development in the Delaware sub-basin.

"Together, these two states produce more oil than the rest of the U.S. combined," Venditti wrote.

Some of the largest companies in the world are in the country and could benefit from a rise in the market, including those below. As Rule told Basenses on The Big Skinny, "The idea that you can buy a business of (this) caliber today at a discount to net present value, when the upside is inevitable, maybe not imminent, but inevitable, is spectacular."

Exxon Mobil Corp.

Rule's most-mentioned pick in the interviews is Exxon Mobil Corp. (XOM:NYSE), a U.S.-based multinational oil and gas company located in Spring, Texas, near Houston. Established as the largest direct successor to John D. Rockefeller's Standard Oil, the corporation was created in 1999 through the merger of Exxon and Mobil.

According to a report by Khadija Saeed on Techstock2 December 22, the company was in the spotlight that day "as investors consider a 'lower-for-longer volatility' oil environment against Exxon's long-term growth strategy, shareholder return potential, and consistent project advancements — particularly in Guyana and the Permian Basin."

At the time of writing, XOM stock was approximately US$118, showing a modest increase for the session, with a market capitalization exceeding US$500 billion.

"One of the most widely discussed macro themes today is the idea that oil's traditional geopolitical risk premium has faded in 2025 — even amid major shocks," Saeed wrote. "Reuters notes that oil volatility has stayed comparatively contained, with prices oscillating in a relatively narrow band for much of the year, supported by supply growth from the U.S., OPEC+, and non-OPEC producers (including Guyana)."

Earlier this month, Exxon released an updated corporate plan through 2030, and the market is still assessing its implications for XOM valuation and cash returns, the article noted. Exxon now anticipates by 2030: US$25 billion in earnings growth compared to 2024 (on a constant price and margin basis) and US$35 billion in cash flow growth compared to 2024.

Reuters also reported that Exxon's updated plan included a CFO transition, with Kathy Mikells set to retire effective February 1, 2026, to be succeeded by Neil Hansen.

"ExxonMobil (XOM), the largest oil and gas company in the U.S., showed negative year-over-year dynamics but exceeded consensus expectations," according to a November 5 research note by Freedom Broker's Sergey Pigarev. "Production growth in Guyana and the U.S. Permian Basin drove operational records. The quarterly dividend was raised by 4% to US$1.03 per share."

Despite headwinds in the oil market, Pigarev said the firm does not anticipate a significant correction in XOM shares. A sizable buyback program and a strong dividend yield of 3.7% should continue to support the stock. However, upside potential from current levels remains limited, he said.

"ExxonMobil increased shareholder payouts this quarter, raising the quarterly dividend by 4% to US$1.03 per share," the analyst wrote. "At current share prices, the annualized yield stands at 3.7%. In the third quarter, share repurchases totaled US$5.1 billion, up from US$4.9 billion in the previous quarter. The number of shares outstanding declined by 1.1% quarter-over-quarter and 4% year-over-year."

He continued, "We reaffirm our target price of US$123 per share and maintain a 'Hold' rating," indicating a nearly 8% return on the stock at the time the note was written.

A Trefis research note released on November 25 said for the company, "Cost-cutting progress remains a key pillar, with Exxon on track to exceed US$18 billion in structural savings by 2030. Strategically, management is focused on high-return production growth in the Permian and Guyana, where project execution remains ahead of schedule. With a sub-10% net-debt ratio, Exxon enters 2026 positioned for stable investment, strong cash generation, and continued capital returns." Trefis' estimate for the stock was US$116, compared to US$116 per share when the note was written.

¹Exxon Mobile has a market cap of US$492.1 billion and a 52-week range of US$97.80 to US$120.81. It has 4.2 billion shares outstanding.

Less than 1% of the company is owned by insiders and management and holding companies, and about 66% by institutions.

Top shareholders include The Vanguard Group Inc. with 10.14%, BlackRock Institutional Trust Co. with 5.24%, State Street Investment Management with 4.9%, Fidelity Management & Research Co. with 2.52%, and Geode Capital Management LLC with 2.28%.

Devon Energy Corp.

Another stock Rule said he owns is Devon Energy Corp. (DVN:NYSE), which is engaged in hydrocarbon exploration in the U.S. It is organized in Delaware with operational headquarters in the 50-story Devon Energy Center in Oklahoma City, Oklahoma. Its operations are in the Delaware Basin, Eagle Ford Group, and the Rocky Mountains (Williston Basin and Powder River Basin).

The company is ranked 267th on the Fortune 500 and 607th on the Forbes Global 2000.

As of December 31, 2024, the company had proved reserves of 2,155 million barrels of oil equivalent, of which 42% was petroleum, 29% was natural gas liquids, and 29% was natural gas.

Devon Energy recently became one of the most closely followed stocks by Zacks.com visitors, according to a piece by Zacks Equity Research on Yahoo Finance on December 15. "Over the past month, shares of this oil and gas exploration company have returned +4.7%, compared to the Zacks S&P 500 composite's -0.2% change," the article said. "During this period, the Zacks Oil and Gas - Exploration and Production - United States industry, which Devon Energy falls in, has lost 1.6%."

Devon Energy is projected to report earnings of US$0.95 per share for the current quarter, reflecting a year-over-year decrease of 18.1%. In the past 30 days, the Zacks Consensus Estimate has increased by 4.6%, the piece noted.

"With an impressive externally audited track record, our proprietary stock rating tool — the Zacks Rank — is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions," Zacks said. "The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Devon Energy."

According to a report by MarketBeat on December 22, Perpetual Ltd. acquired a new position in Devon during the third quarter, as indicated by its latest SEC filing. The fund purchased 30,451 shares of the energy company's stock, valued at roughly US$1,068,000.

Other hedge funds and institutional investors have also recently adjusted their stakes in the company, according to MarketBeat. AQR Capital Management LLC increased its holdings in Devon Energy by 78.7% in the second quarter, Ameriprise Financial Inc. boosted its holdings in Devon Energy by 81.1% in the first quarter, Adage Capital Partners GP L.L.C. increased its position in Devon Energy by 83.9% during the second quarter, and Encompass Capital Advisors LLC acquired a new stake in Devon Energy during the first quarter, valued at approximately US$63,561,000. Lastly, Sourcerock Group LLC expanded its holdings in Devon Energy by 2,132.3% in the second quarter, according to the report.

MarketBeat said several research analysts also have recently published reports on the company, including JPMorgan Chase & Co., which upgraded Devon Energy shares from a "Neutral" rating to an "Overweight" rating and decreased its price target for the company from US$49 to US$44 in a research note on December 8. Two equities research analysts have given the stock a Strong Buy rating, twenty-one have issued a Buy rating, six have given a Hold rating, and one has issued a Sell rating for the company's stock, the site said. Based on data from MarketBeat.com, Devon Energy has an average rating of "Moderate Buy" and a consensus price target of US$44.86.

¹Less than 1% of the company is owned by holding companies and insiders and management, with about 79% held by institutions. The rest is retail.

Top shareholders include The Vanguard Group Inc. with 12.99%, BlackRock Institutional Trust Co. with 6.39%, States Street Investment Management with 5.63%, Geode Capital Management LLC with 3.03%, and EnCap Investments LP with 2.82%.

Its market cap is US$22.85 billion with 627.3 million shares outstanding. It trades in a 52-week range of US$25.89 and US$38.88.

EQT Corp.

Another pick Rule mentioned in the YouTube Mining Network interview is Pittsburgh-based EQT Corp. (EQT:NYSE), formerly Equitable Resources.

EQT is involved in the production, gathering, and transmission of natural gas. It sells natural gas and natural gas liquids to marketers, utilities, and industrial customers in the Appalachian Basin.

According to a report by Maham Fatima for Insider Monkey on December 19, the company is "one of the most profitable value stocks to invest in right now."

In a release on October 23, the company noted that in response to increasing demand for additional capacity on its joint venture Mountain Valley Pipeline (MVP) Mainline system, Mountain Valley Pipeline LLC has officially submitted an application to the Federal Energy Regulatory Commission (FERC) seeking approval to develop the "MVP Boost" project.

This proposed expansion aims to enhance the MVP Mainline's capacity by adding compression at three existing compressor stations in West Virginia and building a new compressor station in Virginia. The project is intended to offer timely and cost-effective access to the rising demand for natural gas among local distribution companies, industrial users, and power generation facilities in the Mid-Atlantic and Southeastern United States.

Mountain Valley Pipeline LLC will oversee the construction and ownership of the proposed MVP Boost project. EQT holds a substantial interest in the joint venture and, as the operator of the MVP Mainline, will manage the facilities of the proposed project, the release said. Subject to regulatory approval, construction of the MVP Boost facilities is anticipated to commence in the winter of 2026-2027, with the goal of achieving full operational status by mid-2028.

On December 12, Mizuho increased the company's price target to US$68 from US$60, maintaining an Outperform rating on the shares, the Insider Monkey report by Fatima noted. This decision came as Mizuho updated its 2026 outlook for the exploration and production sector, adjusting ratings and price targets to reflect the underappreciated value within the group. Although broader investor sentiment is still dampened by concerns over an oil supply surplus and high natural gas storage levels, the firm believes that strong long-term fundamentals will start to drive a market re-rating by 2026.

Fatima noted that earlier, on November 8, JPMorgan raised the price target on EQT to US$64 from US$62, maintaining an Overweight rating on the shares. This announcement came as JPMorgan revised its 2026 projections for the E&P sector, highlighting a significant shift in the energy landscape. While the firm cautioned about dual challenges for oil from massive oversupply and the potential resolution of the Russia-Ukraine conflict, it noted that natural gas has finally reached a long-awaited demand inflection point.

"EQT is positioning itself for the long-term global energy transition through strategic LNG (liquefied natural gas) offtake agreements," Fatima wrote. "The company has secured contracts for 4.5 million tonnes per annum with partners like Sempra and NextDecade, set to commence in the 2030–2031 window. This strategy is designed to bypass a potential LNG oversupply cycle expected between 2027 and 2029, ensuring that EQT Corporation remains a relevant global player with a diverse direct-to-customer sales strategy."

Fintel's George Maybach reported in a piece on Nasdaq.com that on December 19, Citigroup continued its coverage of EQT with a Buy rating.

As of December 5, the average one-year price target for EQT is US$65.70 per share, according to Maybach. The forecasts range from a low of US$48.29 to a high of US$88.20. The average price target indicates an increase of 21.95% from its most recent closing price of US$53.87 per share.

The projected annual revenue for EQT is US$8.6 billion, reflecting an increase of 12.12%, Fintel said. The projected annual non-GAAP EPS is US$14.07.

The article also noted there are 1,860 funds or institutions reporting positions in EQT, which is a decrease of 89 owners or 4.57% in the last quarter. The average portfolio weight of all funds dedicated to EQT is 0.43%, an increase of 6.04%. Total shares owned by institutions have increased by 3.63% over the last three months to 680,182,000 shares.

¹Less than 1% of EQT is held by corporations and insiders and management, and about 94% by institutions. The rest is retail.

Top shareholders include The Vanguard Group Inc. with 12.69%, Wellington Management Co. LLP with 6.76%, State Street Investment Management with 5.44%, BlackRock Institutional Trust Co. with 5.14%, and Blackstone Inc. with 2.93%.

Its market cap is US$33.39 billion with 624 million shares outstanding. It trades in a 52-week range of US$42.85 and US$62.23.