Crude's Sudden Rally Raises the Stakes for These 2 Energy Stocks

By Reuben Gregg Brewer – Mar 11, 2026 at 7:15PM ESTKey PointsDevon Energy and Diamondback Energy are large, independent U.S. energy producers.The U.S. has plenty of oil, so the financial benefit may not be as big as hoped for these businesses.Oil prices will eventually retreat, as they always have before.The geopolitical conflict in the Middle East has impacted energy markets in exactly the same way as previous such events: oil and natural gas prices are rising. There have been dramatic price swings, so there's still significant uncertainty about energy prices. But it is very clear that higher energy prices are good news for pure-play energy producers like Devon Energy (DVN +3.80%) and Diamondback Energy (FANG 0.97%). But there are risks to consider here, as well. Rising energy prices mean higher profits Up front, the news for Devon Energy and Diamondback Energy is very good. They both produce oil and natural gas in the United States, so their production will continue uninterrupted. In the fourth quarter of 2025, Devon Energy's total oil equivalent production averaged 850 MBoe per day. Diamondback Energy's production that quarter came in at 969 MBoe per day. They will both benefit materially from the ability to sell their production at higher price points, thereby increasing revenue without materially increasing costs. Image source: Getty Images. Wall Street clearly recognizes the opportunity, as Devon Energy's shares are up roughly 19% year to date as of this writing, and Diamondback Energy's stock is up 18%. By comparison, the S&P 500 index (^GSPC 0.08%) is down about 1%. Herein lies a potential problem. Sometimes WTI and Brent diverge With Wall Street clearly excited about the prospects for these two U.S. energy companies, what happens if the story doesn't play out as hoped? That could happen for a number of reasons. ExpandNYSE: DVNDevon EnergyToday's Change(3.80%) $1.66Current Price$45.36Key Data PointsMarket Cap$27BDay's Range$43.72 - $45.4252wk Range$25.89 - $46.15Volume14MAvg Vol11MGross Margin23.24%Dividend Yield2.20% For example, both companies hedge their exposure to energy prices. That could limit the near-term benefit of higher commodity prices. If earnings don't meet investor expectations, enthusiasm for these stocks could quickly fade. And even if the companies manage to lock in higher prices for some period of time, the benefit will eventually end. Given that Wall Street tends to be forward-looking, investors are likely to price in the impact of hedges rolling over to lower levels rather quickly. ExpandNASDAQ: FANGDiamondback EnergyToday's Change(-0.97%) $-1.73Current Price$176.64Key Data PointsMarket Cap$50BDay's Range$172.81 - $178.0552wk Range$114.00 - $186.66Volume11MAvg Vol2.4MGross Margin35.16%Dividend Yield2.27% There's also the risk that U.S. energy prices, as measured by West Texas Intermediate (WTI) crude, don't align with global energy prices, as measured by Brent crude. After all, U.S. production isn't likely to be materially impacted, and the U.S. is the key market for that production. WTI and Brent have diverged materially in the past, and it could easily happen again. In the energy sector good news can quickly turn into bad news All in, investors need to be careful that Wall Street doesn't get ahead of itself with these two U.S. producers. The risk shareholders face if that happens could be material. Read NextMar 1, 2026 •By Reuben Gregg BrewerThis $58 Billion Merger Is Creating a New U.S. Oil and Gas GiantFeb 2, 2026 •By Matt DiLalloThis $58 Billion Merger is Creating a New U.S. Oil and Gas GiantDec 8, 2025 •By Matt DiLalloAre Devon Energy (DVN) Stock Investors Happy, Or Did They Miss Out?Jun 29, 2025 •By Lee SamahaPrediction: These 3 High-Yield Oil Companies Just Secretly Moved to Secure Their DividendsMay 9, 2025 •By Matt DiLalloThis Top Oil Stock's Smart Plan Puts It in a Stronger Position to Weather Volatile Crude Oil PricesApr 24, 2025 •By Matt DiLalloThis Top Oil Stock Aims to Get a $1 Billion Boost by the End of 2026About the AuthorReuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.TMFReubenGBrewerStocks MentionedDevon EnergyNYSE: DVN$45.36(+3.80%)+$1.66S&P 500 IndexSNPINDEX: ^GSPC$6,775.80(-0.08%)-$5.68Diamondback EnergyNASDAQ: FANG$176.61(-0.99%)-$1.77*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.