Given the muted oil outlook for 2026, now may be an ideal time for investors to diversify their energy exposure.
With consensus pointing toward an oil supply surplus next year, investors expect prices to remain muted. “Typically, it is very difficult for energy stocks to do well if oil prices aren’t doing much,” Stacey Morris, head of energy research at VettaFi, said during the 2026 Market Outlook Symposium on December 9.
Considering the unpredictable nature of an eventual improvement in oil sentiment and the volatile, weather-dependent prices of natural gas, investors may consider investment opportunities in energy beyond traditional oil and gas producers.
A Modern Energy Strategy for Income and Growth
Therefore, Morris outlined a strategy to capture yield and growth through energy infrastructure and nuclear power.
Midstream MLPs could serve as the defensive anchor for 2026 energy portfolios. Unlike other energy segments which are totally dependent on commodity prices, midstream operators utilize fee-based business models. Midstream equities are currently offering attractive yields backed by strong free cash flow and consistent dividend growth.
Beyond income, midstream assets are critical to the AI revolution. As data centers drive a significant increase in electricity demand, the pipelines required to transport natural gas to power plants have become crucial infrastructure.
The Alerian MLP ETF (AMLP ) tracks the Alerian MLP Infrastructure Index (AMZI), a cap-weighted composite of energy infrastructure MLPs. AMZI was yielding 7.7% as of December 8.
Complementing the income from midstream is the growth potential of nuclear energy. Morris identified nuclear as a primary beneficiary of the tech sector’s hunt for reliable, carbon-free baseload power.
Investors seeking exposure to this ecosystem may consider the Range Nuclear Renaissance Index ETF (NUKZ ), which is based on the Range Nuclear Renaissance Index (NUKZX). The index is designed to track companies driving this expansion. This includes companies involved in advanced reactors, utilities, construction and services, and fuel.
By combining the fee-based stability of midstream with the structural growth of nuclear, advisors can build an energy allocation that is not reliant on oil prices.
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vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for AMLP and NUKZ, for which it receives an index licensing fee. However, AMLP and NUKZ are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMLP and NUKZ.
