Cheap energy stocks shrug off climate alarm with cash flowing

The sobering United Nations-backed report on global warming last week prompted a lot of hand wringing from governments and the general public about fossil fuels. The response from investors in the oil and gas industry? A big shrug.

Energy stocks have jumped this year as oil prices bounced back from Covid-19 lockdowns and investors rotated into cyclical sectors. The energy group, which includes oil majors like Exxon Mobil Corp. and refiners like Phillips 66, has advanced 30 percent, beating out more expensive sectors in the benchmark like technology. | Photo: LUCAS JACKSON/Reuters / X90066

Shares of energy companies, which led the S&P 500 higher for much of the year, ended the week little changed. Oil prices rebounded from a selloff earlier in the month, despite the warnings that the world must wean itself off fossil fuels, and fast.

Investors must now weigh the industry's soaring revenue and improving profitability against the long-term prospect of a carbon-light world.

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