The company missed earnings’ forecasts on Thursday, as its oil and gas output fell 5.6 percent and its chemical business lagged.
The sector’s earnings have reflected the struggles stemming from weaker global oil prices. Exxon, which is the nation’s largest producer of natural gas, has also been hurt by low U.S. natural gas prices.
Khan said Citigroup’s top picks are in the refining sector.
“We’re bulls on refining for a number of different reasons — the first being that the U.S. has become a net exporter of refined product,” he said.
He added that refiners have been giving back a tremendous amount of cash flow back to shareholders in the form of special dividends and share repurchases.
—By CNBC.com’s Katie Little
Additional News: Shell CEO: We Had Concerns Over Cove Valuation
Additional Views: No Surprises Behind Chinese Oil M&A Mania
CNBC Data Pages:
Citigroup Global Markets or an affiliate received compensation for products and services other than investment banking services in the past 12 months.
Follow Katie Little on Twitter @katie_little.