This comes at a time when oil prices have been highly volatile, which is a great determinant of energy companies' earnings and share-price performances. Oil prices and stocks have fluctuated violently for weeks with concerns about the European debt crisis and its impact on the world's economy.
But it's not just the economy that has added to that volatility, but also a host of other challenges, including geo-political risk, such as the disruption of supply from the Middle East and North Africa, and catastrophic events, such as the earthquake and tsunami in Japan, and the oil spill in the Gulf of Mexico.Underlying this is a renewed belief that the global energy supply isn't unlimited and that it will become a factor in controlling the world's economic growth. The S&P 500 Index is down 6.1% this year, while the oil and gas industry, as tracked by Morningstar, has fallen 4.6%. Stocks in the energy sector as tracked by S&P have dropped 6.9%. In 2010, the S&P energy sector index advanced 18%, versus a 13% increase for the broader S&P 500. Here are Goldman Sachs' current energy stock picks for 2011, all with six-month price targets from the bank's latest "conviction buy" list: