There are two things that connect Devon Energy (DVN -2.81%), Diamondback Energy (FANG -1.80%), EOG Resources (EOG -1.48%), and Permian Resources (PR -4.86%), since all four are, one, U.S.-based, and two, energy producers.
That's been a very good thing lately, as energy prices have been strong.
But history is very clear that energy prices won't stay strong forever.
Here's why you may want to sell now to lock in some gains before it's too late.
The geopolitical conflict is a big energy issue Energy prices rise and fall over time.
There are any number of reasons why energy prices change, from supply and demand dynamics to disasters (manmade and otherwise) to geopolitical conflict.
That last one is what's driving prices higher today, with the geopolitical conflict in the Middle East upending global energy markets.
There's been a secondary benefit for U.S.
energy producers such as Devon Energy, Diamondback Energy, EOG Resources, and Permian Resources because countries around the world are rethinking energy security.
That makes production from an economically and politically stable region like North America extra attractive.
So there is reason to be optimistic about these companies over the long term.
However, you can't ignore the key fact here: commodity prices are the main driver of an energy producer's business.
The graph below makes that very clear, as you can see that the stocks have been tracking the price of West Texas Intermediate (WTI), a key U.S.
energy benchmark (the blue line).
DVN data by YCharts The conflict will only last so long The problem is that oil prices have been moving in line with investor sentiment amid the geopolitical conflict in the Middle East.
Energy prices rise when investors think the conflict is worsening; they fall when the outlook for the....
