Last issue, we added two oil and gas producers to our Model Portfolio, EOG Resources (NYSE: EOG) and Pioneer Natural Resources (NYSE: PXD). Since then, they’re up more than 10 and 12 percent, respectively.

The key catalyst so far appears to be strengthening oil prices. And it’s a force that should keep on driving returns higher in 2021, as crude eventually reaches our projected trading range of $50 to $60 a barrel.

Rising oil and natural gas prices obviously benefit producers’ earnings directly. And for both companies, it will be on a leveraged basis, as they benefit from squeezed out costs and heightened efficiencies put in place to weather the tough conditions of the past year.

But as we’ve pointed out before, the 50s are likely to prove extremely significant for another reason. They represent a level of prices that’s likely to greatly increase investors’ comfort level in business plans of companies like EOG and Pioneer, as well as others like ExxonMobil (NYSE: XOM).