Investing.com -- Barclays and Redburn Atlantic have issued cautious outlooks for the oil and gas sector, downgrading some stocks as falling oil prices and uncertain macroeconomic conditions weigh on the industry.
Barclays (LON:BARC) lowered its WTI oil price forecasts for 2025 and 2026 to $60–$65 per barrel and downgraded Chevron (NYSE:CVX) to Equal Weight, and Murphy Oil (NYSE:MUR) and Net Power to Underweight.
The bank said that “uncertainties persist,” citing an environment where even resilient companies may flex spending plans in response to potential downside risk.
“Cost will be the question,” Barclays added, pointing to recent efforts from companies like Devon Energy (NYSE:DVN) to optimize expenses amid the weaker backdrop.
“We expect sensitivity to current development programs to be the key focus for 1Q25 earnings,” stated Barclays.
Redburn also struck a cautious tone, forecasting Brent crude could fall to $57.50 per barrel by the end of 2025 due to oversupply and weak demand.
“The oil market was looking increasingly precarious even prior to the announcement of widespread U.S. tariffs,” analysts noted.
Redburn now expects a market surplus of 1 million barrels per day next year and cut its 2025 average oil price estimate to $75-$64 per barrel.
Redburn downgraded Equinor and Chevron to Sell and Eni to Neutral. On Chevron, it warned the company “screens as expensive versus peers,” while Equinor’s “gas price-led narrative is running out of steam.”
Despite the cautious tone, Redburn sees relative strength in Shell (LON:SHEL) and TotalEnergies (EPA:TTEF), maintaining Buy ratings on both and forecasting “double-digit cash distribution yields on average in 2025–27.”