crude prices are tumbling on recession fears but one analyst remains bullish on oil stocks saying a downturn is unlikely to dampen demand too much dan pickering chief investment officer at pickering energy partners said that some energy sectors had reported strong secondquarter earnings such as refiners exploration and production companies and oilfield services the companies have dramatic cash flows … much of it returned to investors via dividends variable dividends share repurchases and debt paydown he told cnbc pickering argued that certain firms balance sheets are as healthy as they have been in decades while valuations look inexpensive even if oil drops to 70 per barrel the low end of expected prices in a mild recession scenario pickering said international benchmark brent crude futures traded around 94 a barrel on monday while us west texas intermediate futures were around 88 they have both fallen sharply from june highs of over 120 a barrel although remain up on the year stock picks pickerings favorite stocks include devon energy  diamondback energy and antero resources in the exploration and production sector and schlumberger in oilfield services he isnt the only one optimistic on energy stocks goldman sachs told clients in july that diamondback energy  eqt and chesapeake energy were solid bets for investors from a riskversusreward standpoint the s  p 500 energy sector s pricetoearnings ratio for the last 12 months was 1252 times according to factset data as of aug 8 compared to the broader index which was around 19 times a lower pricetoearnings ratio is attractive to investors pickering said that although usually during recessionary periods oil demand growth slows we dont typically go negative unless its a really bad economic event like the global financial crisis in 2008 2009 or covid in 2020 the reality is we still have a real tight market particularly as we squeezed the russians out on the supply side pickering told cnbcs squawk box asia on aug 4 in response to russias invasion of ukraine earlier this year the us has banned russian crude imports while the european union is planning a gradual phase out of russian crude imports  and despite recent falls pickering expects crude prices to return to around the 100 mark by the end of the year its probably not going to be 200 but i think its going to continue to be higher than most people would like and pretty dang good for the energy sector pickering said