Crude prices remain well off the peak of 2014, but oil producers and companies relying on oil related revenues should not be written off just yet.
Rampant cost cutting and steps to improve operating performance means many such stocks deserve a second look.
Some names have already staged a major come back since early 2016 when Brent crude was trading at around the $30 per barrel mark.
Oilies fight back
While crude has experienced something of a recovery since the lows of 2016, with Brent crude futures currently at $56 per barrel, oil is still well off the $115 per barrel peak reached in the middle of 2014.
Against this backdrop, it´s incredible that some oil producers have managed to get their earnings back to 2014 levels.
Norway´s Statoil managed just such a feat, as aggressive cost cutting and rising production volumes enabled it to get second-quarter 2017 earnings back to the highs of 2014.
Despite the improvement, however, Statoil shares are still over 30% down on the peaks of 2014. This is despite the stock having rallied by around 20% this summer.
Shares in oil major Shell are only modestly short of their 2014 peak, having rallied by around 60% since the lows of early 2016.
Shell´s latest set of quarterly results beat analysts´ expectations, with second-quarter earnings rising by 245% versus the year-ago period.
Revenues for the second quarter of 2017 smashed forecasts, at $72.1bn versus expectations of $67.8bn.
Much of the improvement was put down to improved operational performance.
For instance, operating expenses were $9.5bn compared with $11.5bn in the same period of 2016.
At the same time, crude prices were also much improved versus the 2016 second quarter.
Perhaps what sets Shell apart from many of its rivals is the firm´s stark acknowledgment that oil prices may never return to the levels of 2014.
Faster pay back
US giant ExxonMobil reported a near doubling in earnings for the second quarter, though lagged analysts´ expectations. Both higher oil prices and improved refining margins versus 2016 boosted its bottom line.
In common with Shell, its total oil production was little changed versus the year-ago period.
On the plus side, Exxon appears well placed to ride the current trend of rising US oil production through its assets in Texas and the Gulf of Mexico. Its US output is expected to grow by 7% a year through to the end of 2020.
Again, like Shell, Exxon has been focusing on projects with a faster pay back. Cash flow is more important in an uncertain world where oil is trading in the $50s rather than the $100s.
Where Exxon differs from Shell, however, is that it appears to take a more positive view on the long-term outlook for oil prices.
So why the longer-term pessimism?
The growing take-up of green technologies makes the longer-term outlook for oil appear more uncertain than ever.
Just a decade ago, the shoe was on the other foot as the world continued to worry about the eventual depletion of oil resources.
These days, the longer-term outlook is being pummelled by the rapid take-up in electric cars, which is going hand in hand with an increasing backlash against the detrimental impact on public health and the environment that is being linked to the traditional combustion engine.
On the production side, meanwhile, technology is likely to prove a double-edged sword for producers. Changes in drilling techniques mean produces can break even at lower crude prices.
In the longer-term though, that also means there´s going to be more supply in the market.
While the longer-term picture is less clear, investors in oil stocks will likely have to worry more about the rise of green technologies such as electric cars from about 2030 onwards.
Until then at least, there´s likely to continue to be some big opportunities from being long in oil stocks.
OPEC production cuts and higher Chinese imports have helped oil prices to rally from around $47 in early July to the current $56 per barrel.
Given the huge progress some of the oil majors have already made in improving their operational performance, any further upward movement in oil prices could provide another big uplift for profits.
In an environment of improved short-term supply and demand dynamics, trading giant Glencore has forecast oil prices to move further towards the $60 per barrel mark by year-end.
Glencore expects higher volumes to help it offset lower volatility in oil prices and correspondingly tighter margins, claiming it is on course to ship around 25% more crude and refined products this year compared with 2016.