This year has been brutal for the oil sector. Crude prices cratered more than 30% during the first half, which doesn't even describe the intense volatility as oil went negative before staging an epic rebound. This slump forced several oil companies to file for bankruptcy protection while putting many more on the brink.

However, as challenging as the oil market is these days, the global economy still runs on crude oil, and the oil market is already starting to bounce back. Three top oil stocks poised to benefit from this rebound are EOG Resources (NYSE:EOG)Enbridge (NYSE:ENB), and Magellan Midstream Partners (NYSE:MMP), making them top buys right now.

Oil pumps in motion at night.

Image source: Getty Images.

Stomping on the gas

EOG Resources acted quickly as crude prices crashed earlier this year. The oil producer slashed its drilling budget by 46% and shut in a quarter of its production during May. These moves preserved its resources so that it could cash in on an eventual rebound in oil prices.    

That bounce-back has since emerged, giving EOG the confidence to begin restarting its idled wells, aiming to accelerate its production into the second half of the year. EOG also took off most of its oil hedges to capture the full upside of higher prices. 

Analysts now believe EOG will generate a gusher of free cash flow over the next year. For example, SunTrust sees it producing $1.5 billion next year, while analysts, on average, expect it to generate more than $400 million in free cash. That will provide EOG with excess money to continue paying down debt and growing its dividend, which should boost its share price. 

Immune to the downturn

Shares of Canadian pipeline giant Enbridge have tumbled about 25% this year despite having almost no exposure to all the volatility in the oil market. That's because its customers pay it even if they don't use the capacity on its oil pipelines. As a result, Enbridge expects to deliver on its 2020 cash flow forecast.

Given that outlook, Enbridge is on track to generate more than enough cash to support its dividend -- which now yields 7.7% following this year's sell-off -- and the bulk of its expansion program. Meanwhile, it has plenty of growth ahead as it continues to expand its pipeline network to support the expected growth of oil and gas production in North America. That should give it the fuel to continue growing its dividend, which it has done for the past 25 years.

Gasoline demand is making a comeback

The COVID-19 outbreak took a big bite out of gasoline demand during the second quarter as government shutdowns affected non-essential businesses and travel. That had some effect on master limited partnership Magellan Midstream Partners, which transports refined products and crude oil.

However, the company recently noted that gasoline demand had bounced back big-time, giving Magellan Midstream increasing confidence that it can achieve its revised guidance for 2020 and generate more than $1 billion in cash. That would give the company enough money to cover its dividend -- which currently yields more than 9% -- with some room to spare. That makes it an attractive buy for both income and value investors, since its unit price is down 35% for the year, even though market conditions are on the upswing. 

Great ways to play the oil market these days

Oil prices have bounced around quite a bit this year. While that volatility is likely to continue during the second half, most market watchers believe crude oil is on an upward trend since most states have reopened their economies, and OPEC stepped in with big-time support. That outlook bodes well for EOG, Enbridge, and Magellan Midstream since their stock prices should continue rebounding as market conditions keep improving.