While the global oversupply of oil continues to weigh on crude prices and suppressed stock prices for oil companies, the sector offers attractive value to investors, experts argue.
"The sector has been underperforming, there's great value, so you have to play the sector," Beat Wittmann, partner at Swiss financial advisory Porta Advisors, told CNBC's Squawk Box on Wednesday.
"The sector is so attractive right now and it's a global demand-supply game."
Crude oil prices are stuck in the range of $45 to $60 a barrel, according to Wittmann, but he thinks there is great value in the stocks of the super major oil companies.
"They've cut costs and exploration programs. They've digested and readjusted balance sheets and quite frankly that investment case does not so much depend on if the oil price is at $50 or $60. They just look through that," he said.
Wittmann added that these oil companies offer superior dividend yields at great valuations and adds that the sector is attractive right now. Rather than picking any individual companies or geographical areas, he advised investors to play the sector as a whole.
Nick Nelson, head of global and European equity strategy at UBS, had a similar view, saying oil is looking interesting, despite being the worst performing sector year to date.
"(The oil sector) does have a very high dividend yield. It's got the highest dividend yield in the European market at about 6 percent, so we think there's some value there," he told CNBC's Squawk Box.
The oil and gas sector of the pan-European Stoxx 600 index is down 10.95 percent year to date. That compares to the Stoxx 600, which is up 5.04 percent so far this year.
Nelson predicts crude prices will move towards $60 by the end of the year, as supply cutbacks in recent years and underinvestment in deep sea crude oil exploration will lead to a shortfall in 2019 or 2020.
"The demand side we think is reasonable: global growth is in a pretty good place; Europe's recovering; the U.S. is steady; and the U.K. is probably the only one major economy that seems to be slowing," he added.
Both the International Energy Agency and OPEC have recently upgraded oil demand growth forecasts for 2017 by 1.51 million barrels per day (bpd) and 1.37 million bpd, respectively. 2017 now looks set to mark a third consecutive year of above trend oil demand growth, according to Jon Rigby and Joseph Head, analysts at UBS.
"After 13 consecutive quarters of oversupply, inventory drawdowns began in (the second quarter), with OPEC's cuts compensating for a significantly higher trajectory for U.S. production than looked likely several months ago. The demand side continues to hold up well," they said in a research note published Tuesday.
Rigby and Head predict oil prices could rise by $5 per barrel if larger inventory draws occur next year, and geopolitical risk or supply disruption could add another $10 per barrel. They currently have a long term view for Brent crude prices of $60 to $80 per barrel.
Brent crude is currently trading up 44 cents at $51.24 per barrel, while WTI crude is up 34 cents to $47.89 per barrel.