3 Energy Stocks To Watch If Inflation Keeps Fuel Prices High

Inflation is still biting, energy prices are jumping, and interest rates look set to stay higher for longer, so investors cannot ignore how that mix ripples through U.S. energy producers and refiners. This backdrop can punish some sectors while creating openings elsewhere, and missing that shift can mean missed returns. This article walks through three stocks exposed to these inflation and fuel price pressures and explains why they deserve a closer look now.

The stocks covered in this piece are just a small sample, and the full screen surfaced 41 more U.S. energy producers and refiners with equally compelling narratives that are not broken down in detail here. To go straight to the full universe and identify which tickers best match your own thesis, analyze the U.S. Energy Producers and Refiners screener.

Sable Offshore (SOC)

Sable Offshore puts the screener theme on display, since its offshore California platforms and subsea pipelines tie cash flows directly to crude and gas prices when inflation keeps fuel costs high.

Sable Offshore Corp. is an independent U.S. offshore oil and gas producer operating three platforms and subsea pipelines off California, giving direct leverage to commodity prices, and it currently carries a market value of about $637 million.

"The shift to low-cost Perf Add and ESP optimization, where early intervals have produced 900 to 1,100 barrels per day compared with forecasts of 250 to 280 barrels per day at around $0.64 per barrel finding and development cost, points to a program that can expand production while supporting stronger net margins."

The question is what happens if one still underappreciated pressure quietly reshapes how much of those future barrels actually turn into lasting margin strength.

If that pressure is the real hinge, read the full narrative for Sable Offshore to see how Sable Offshore’s cash generation story could be accelerating beneath the surface.

CVR Energy (CVI)

CVR Energy links the screener theme directly to your wallet, since its U.S. refineries live on the front line of higher gasoline and diesel prices when inflation keeps fuel costs elevated.

CVR Energy runs refineries, renewable diesel facilities, and nitrogen fertilizer plants in the U.S., with about US$7.7b of its roughly US$8.5b revenue coming from petroleum and US$677 million from nitrogen fertilizers, and the stock valued at about US$6.2b today.

When inflation lifts pump prices, CVR Energy can benefit through wider crack spreads on gasoline and diesel, but that tailwind is complicated by policy costs that bite directly into the refining economics investors care about.

"Escalating RFS compliance costs, including recent net RIN expense levels of $143 million in one quarter and $216 million in the next, are set to remain a large structural burden that can continue to compress net margins and free cash flow even if headline crack spreads stay supportive."

What happens if one less visible policy lever shifts just as energy prices stay firm and the market keeps assuming those wider margins will stick?

That hinge could be crucial, so read the full narrative for CVR Energy to see how CVR Energy’s policy burden might be masking upside in its fuel and fertilizer engine.

Ring Energy (REI)

Ring Energy is one of the clearest pure plays on the U.S. Energy Producers and Refiners theme, with its oil and gas output tying cash generation directly to commodity prices as it earns about US$324 million from exploration and production and carries a roughly US$357 million market value.

Ring Energy’s acreage across West Texas and New Mexico means your exposure here is tightly linked to how U.S. oil and gas prices respond to sticky inflation and higher fuel costs, which is exactly what this screener is built to surface.

"The company's recent acquisition and efficient integration of Lime Rock assets, featuring mature, low-decline production and a strategic focus on operational synergies, have led to meaningful reductions in lease operating expenses and are expected to deliver continued cost savings and operational stability, positively impacting net margins and free cash flow."

The real test comes if one less visible pressure on its balance sheet shifts just as those efficiency gains start flowing through to margins.

That pressure could be the real swing factor, so read the full narrative for Ring Energy to see how operational gains and balance sheet risks might be quietly decoupling.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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