Energy sector favored for 2026 due to strong fundamentals and inflation protection amid complex oil market risks

Leo Nelissen highlights energy as his top sector for 2026, citing structural underweighting in the S&P 500 and strong long-term rotation potential. Despite complex oil market dynamics involving inventory drawdowns, geopolitical risks, and inflation sensitivity, his preferred stocks like TPL, VNOM, CNQ, CVX, and WBI offer high margins and resilience across various oil price scenarios. Nelissen focuses on secular growth and inventory trends rather than just geopolitical risks, recommending a balanced approach to income and growth investments in energy. This outlook suggests energy could outperform as investors seek inflation protection and stable returns amid market uncertainties.