Global Oil Glut Intensifies, Energy Stocks Face Dim Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Global Oil Inventory Surge: Currently, there are 1.4 billion barrels of oil on the water, which is 24% higher than the average for the same period from 2016 to 2024, leading to a significant drop in oil prices, with West Texas Intermediate now at $57 per barrel, down $15 since the start of the year, directly impacting energy companies' profitability.
- Weak Energy Stock Performance: The decline in oil prices has caused energy stocks to fall, with Chevron's share price down 9% since September and Occidental Petroleum down 20% year-to-date, indicating a waning market confidence in the energy sector.
- Future Supply-Demand Imbalance Forecast: The International Energy Agency predicts that global oil supplies will exceed demand by 3.8 million barrels per day in 2026, creating a record mismatch, with Brent oil expected to drop to $55 in Q1 next year, further squeezing energy companies' profit margins.
- Layoff Wave Hits the Industry: In response to ongoing market pressures, ExxonMobil announced 2,000 job cuts, while other energy firms like ConocoPhillips and Chevron are also proceeding with layoffs, reflecting the industry's urgent need for cost control amid uncertainty about future demand.
COP
$93.31+Infinity%1D
Analyst Views on COP
Wall Street analysts forecast COP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for COP is 112.38 USD with a low forecast of 100.00 USD and a high forecast of 120.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
13 Buy
3 Hold
0 Sell
Strong Buy
Current: 91.940
Low
100.00
Averages
112.38
High
120.00
Current: 91.940
Low
100.00
Averages
112.38
High
120.00
About COP
ConocoPhillips is an exploration and production company. Its Alaska segment primarily explores for, produces, transports and markets crude oil, natural gas and NGLs. The Lower 48 segment consists of operations located in the 48 contiguous states in the United States and the Gulf of Mexico. Canadian operations consist of the Surmont oil sands development in Alberta, the liquids-rich Montney unconventional play in British Columbia and commercial operations. The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea, the Norwegian Sea, Qatar, Libya, Equatorial Guinea and commercial and terminalling operations in the United Kingdom. Asia Pacific segment has exploration and production operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. Other International segment includes interests in Colombia as well as contingencies associated with prior operations in other countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
