Hi Bob and EKS,
What is you working thesis for this sector and this company specifically given the recent report that there will be glut of oil over the next few years and there is in addition a potential for a recession in many westernize countries:
blogs.worldbank.org
The recent study suggesting there will be a glut of oil over the next few years comes from the International Energy Agency (IEA) and other energy market analysts. The IEA forecasts a significant global oil surplus reaching as much as 4 million barrels per day in 2026, driven by OPEC+ producers and other countries increasing production while demand growth remains sluggish. This surplus is much higher than previous estimates and reflects ongoing production increases alongside weaker-than-expected demand. The oil glut is expected to put downward pressure on prices through 2025 and 2026, with Brent crude prices projected to average around $68/bbl in 2025, dropping to about $60/bbl in 2026 before stabilizing. The surplus is driven by production growth mainly from OPEC+ and countries like the US, Brazil, and Canada, while demand growth slows especially in developed nations and some emerging markets due to factors like adoption of electric vehicles.?
In summary, the recent influential study forecasting this oil glut is mainly the IEA's 2025-2026 outlook report, supported by data from other agencies like the US EIA and market analysis groups, highlighting a prolonged period of oversupply due to rising production and sluggish demand growth.?
This aligns with the context that Northern Oil and Gas (NOG) is more oil-focused in production, a sector currently facing the risk of oversupply and softer prices over the next few years.
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Fair disclosure I recently sold all producing E&P and only held on to a Canadian royalty company that has land holding that they lease in the Permaniann Basinn and they have no operational costs.
Alternatively, many oil sand stocks are still break even or better down to $35 per barrel. |
