As crude oil enters 2025 in an elevated range due to increasing global energy demands and many new investments in offshore production, energy stocks could be due to rise. Energy firms had a lackluster year in 2024, but a renewed focus by the new administration on incentivizing an increase in energy production by loosening regulations over drilling on federal lands could help boost the sector. If OPEC restrains production, as many analysts expect, it could also lead to higher oil prices and a boon for energy firms.
As an investor in the energy sector, it can be difficult to surmise which specific companies are most likely to benefit from these national and global trends. One approach for those broadly bullish on the energy sector in 2025 is to instead cast a wide net via an energy exchange-traded fund (ETF). These funds can offer exposure to a swath of the energy sector without requiring an investor to make specific stock picks.
