It is a tough time to be an investor in oil and gas stocks.

Oil prices might be more than double the levels of 2016, when they sank below $30 a barrel, but the U.S. exploration and production sector, as measured by an index tracked by S&P Dow Jones, is trading at a 15-year low.

The reasons for investor apathy are multiple, from long-term fears about the future of the fossil fuel industry to short-term concerns about the new breed of shale-focused drillers’ ability to generate cash.

But the bearishness is unmistakable. Amid the broad sell-off, energy’s share of the market capitalization of the S&P 500 has fallen to less than 4.5%, down from about 15% a decade ago. Today’s share is even lower than during the late 1990s dotcom boom, when tech stocks were rampant and oil prices collapsed below $10 a barrel.

Some fund managers see an opportunity to pick up oversold shares cheaply, but many see much better opportunities to make money elsewhere.

“I used to put my money on oil and gas and go to sleep,” said Tom Sanzillo, director of finance at the Institute for Energy Economics and Financial Analysis and a former manager of the New York State pension fund. “Apple looks a lot better than spending time on this dying industry.”

Jennifer Rowland, senior equity analyst at Edward Jones, said energy stocks were stuck in a vicious cycle in which investors have turned away from the sector, leading to underperformance and then further neglect. She noted that some of the smaller U.S. E&P stocks had been “absolutely crushed” over the past few months, and that investors were “winning if [they’re] down only 10%.”

A $1 million investment in S&P’s U.S. E&P index at the start of 2016 would have lost about $240,000 since then, with dividend payouts unable to compensate for the loss in equity value.

A leading factor has been bearish oil and gas markets, said analysts. This year crude prices have rallied from fourth-quarter lows, but the market has been volatile and the days of $100-a-barrel crude are broadly believed to be long gone, given the huge growth in output from the U.S. shale sector.

Oil stocks have also been hit by the apparently rising probability of an extended trade war between the U.S. and China. Meanwhile, fears of a global economic downturn have swept aside concerns of tighter supplies, as U.S. sanctions have cut Iranian exports and weighed heavily on Venezuela’s output.

The volatility means that investors cannot rule out a price collapse that would make a deep impression on companies’ revenues.

Stewart Glickman, energy equity analyst at CFRA Research, said hydrocarbon producers had lost the faith of investors for two fundamental reasons, besides unpredictable oil prices. For one, he said, the sector failed to show discipline on cost cuts even when oil prices were in better shape.

“Exploration and production companies have a track record of not producing cash flow,” he said. “They didn’t help themselves when oil prices were high.”

Many investors also refuse to touch even high-growth oil producers because of their perceived failure to fully embrace stricter environmental, social and governance (ESG) standards. Glickman described the sector, in general, as “dancing between the raindrops”.

However, some say the selling has gone on so long that valuations have now reached levels at which further big falls are unlikely. The recent slump in the shares of Cimarex Energy Co., for example, a mid-cap explorer based in Denver, has opened up a huge 10-point discount, in terms of its forward price/earnings ratio, to the S&P 500.

Darren Sissons, Toronto-based partner at investment manager Campbell, Lee & Ross, said oil and gas was “massively underweighted” in investors’ portfolios and exposures should ultimately rise, given that the world remains highly dependent on fossil fuels for power generation. 

Other sector bulls agree that the integrated supermajors look increasingly compelling, since they produce high and consistent cash flows and, with their strong balance sheets, are well-positioned to make a transition to a lower-carbon economy.

Chevron Corp. and Exxon Mobil. Corp., for example, offer dividend yields of over 4% and 5% respectively, while those of BP Plc and Royal Dutch Shell Plc exceed 6%. Plus, investors note, each company has vowed to continue to provide a reliable, growing dividend.

But even with dividend yields on highly rated supermajors in many cases paying out more than highly risky junk bonds, the prevailing mood is still cautious. Some analysts are starting to think that the current environment—low share prices and bleak sentiment—could well be the new normal.

“The market is just not responding [to oil price increases] how it used to,” Sanzillo said.

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