The energy industry significantly improved in the third quarter of 2026, surpassing other industries and the S&P 500 index, which only grew by 2.0%, with a return of 16.5%. This return reflects a remarkable transformation in this sector, although various trends within the sub-sectors of this industry show significant differences.
Significant Growth of Refineries
Refining companies, particularly Marathon Petroleum, Phillips 66, and Valero Energy, were recognized as the biggest winners of this period, averaging over 52% return. In contrast, integrated oil and gas companies averaged 20%, exploration and production companies around 13%, and the midstream group also averaged 12% growth. This performance of refineries tells an interesting story in the third quarter, coinciding with a shortage of refined products, especially diesel, in global markets.
Refiners' Performance in Global Markets
Among refiners, Marathon Petroleum led with 55.1%, Phillips 66 with 51.8%, and Valero Energy with 49.4% return during this period. These results indicate extraordinary performance not only over a year but also within a quarter. Overall, refining margins, or "crack spreads," significantly increased due to disruptions in refining capacity in Russia and the Middle East. By September, diesel margins reached an extraordinary level, and American refiners operated at high utilization rates to meet demand.
The strong performance was not limited to the largest refiners; companies like PBF Energy with nearly 70% increase, CVR Energy with 86%, and HF Sinclair with 55% growth, indicate the expansion of this growth in the refining industry.
Oil and Gas Companies and Existing Differences
In the exploration and production sector, companies averaged a 13.1% growth, although this figure shows interesting differences among various companies. Companies with a high dependency on oil performed significantly better than those focused on natural gas. For example, SM Energy grew by 30.2% and APA Corporation by 28.4%, while several natural gas producers like Comstock Resources faced a 17.4% decline.
This discrepancy serves as a reminder that "energy" is not an integrated business, and oil and natural gas have different supply and demand dynamics.
The Midstream Group and Its Varied Performance
The midstream group also averaged a 12% growth, but significant differences exist here as well. The strongest performances came from marine transportation and tankers, while major North American pipeline operators have not been as successful.
These developments in the energy market indicate the emergence of new trends and challenges that may impact this industry in the near future. Analysts advise investors to pay close attention to these changes and to invest in this sector with greater awareness.
