What Investors Should Note From IEA's Latest Oil Market Report
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The latest report from the International Energy Agency (“IEA”) reveals significant shifts in the global oil market. Supply is increasing, but demand growth is slowing, with projections of a surplus by 2025. The report highlights how economic uncertainties, changing energy preferences, and global events are shaping the market.Despite a cautious tone, the IEA’s report suggests that there are key opportunities in oil-focused investments, particularly as demand-supply imbalances create room for strategic gains.Those interested in the sector could benefit from focusing on resilient stocks like EOG Resources EOG, ExxonMobil XOM and Devon Energy DVN.Supply Rises While Demand SlowsAccording to the IEA, global oil demand is expected to grow by 920,000 barrels per day (bpd) in 2024 and 990,000 bpd in 2025. This is a noticeable slowdown compared to the strong recovery after the pandemic. A major factor is China, the world’s largest oil importer, where demand growth is projected to drop significantly—from 1.4 million bpd in 2023 to just 140,000 bpd in 2024.On the other hand, oil supply is increasing. Countries outside the OPEC+ group, such as the United States, Canada, Guyana and Argentina, are expected to add 1.5 million bpd annually over the next two years. This growth could lead to a surplus of over 1 million bpd by 2025, even if OPEC+ continues its production cuts.Different Views: IEA vs. OPECThe IEA’s cautious outlook differs from OPEC’s more optimistic predictions. While the IEA expects demand growth to stay below 1 million bpd in 2024 and 2025, OPEC forecasts growth of 1.82 million bpd in 2024 and 1.54 million bpd in 2025.OPEC has adjusted its forecast downward for four straight months, moving closer to the IEA’s perspective. However, it still anticipates stronger demand than the IEA, indicating differing views on economic recovery and a shift to cleaner energy.Pressures From Clean Energy and Economic TrendsThe IEA notes that the rise of clean energy technologies and the global push for renewable energy are steadily reducing oil demand, especially in transportation and power generation. Weak economic conditions and the end of post-pandemic demand surges are further slowing growth.That said, there’s a silver lining. Demand for diesel and gasoil in OECD countries has been stronger than expected, prompting the IEA to revise its 2024 forecast upward by 60,000 bpd.The Road Ahead for Oil MarketsDespite challenges, there is optimism for the oil market. An expected oversupply could help stabilize or reduce prices, benefiting energy-dependent economies. Additionally, investments in U.S. shale production and other global energy projects ensure reliable supply.We recommend keeping track of stocks like EOG Resources, ExxonMobil and Devon Energy. Each of these stocks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.EOG Resources is a leading player in the Permian Basin, leveraging its extensive acreage in the prime Northern Delaware region. The company excels in cost control and technological innovation, such as Super Zipper fracs, enhancing operational efficiencies. With a strong focus on maximizing returns through strategic investments and partnerships, EOG continues to drive significant growth and value in the region.ExxonMobil is one of the largest publicly traded oil and gas companies in the world with operations that span almost every corner of the globe. Spring, TX-based ExxonMobil is fully integrated, meaning it participates in every aspect related to energy — from oil production, to refining and marketing.Devon Energy is an independent energy company whose oil and gas operations are mainly concentrated in the onshore areas of North America, primarily in the United States. The company’s assets are spread across the key oil assets of Delaware Basin, Eagle Ford, Anadarko Basin and Powder River Basin.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Devon Energy Corporation (DVN): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report EOG Resources, Inc. (EOG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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