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The Zacks Oil and Gas – International Exploration and Production (E&P) industry is under pressure from oversupply risks, volatile commodity prices, and weakening demand. The sector is currently ranked #178 out of 245 Zacks industries, placing it in the bottom 27%. Analysts project a concerning 111.1% decline in aggregate earnings estimates for 2025 within the industry.
Key challenges include a significant rise in U.S. crude inventories and a slowing demand outlook, potentially compressing profit margins for producers. Additionally, persistent cost inflation is further squeezing profitability. The industry has decreased over 40% in the past year, while the broader Zacks Energy sector increased by 3.9% and the S&P 500 gained 17.8%.
Despite these issues, companies like Vermilion Energy (VET), VAALCO Energy (EGY), and Capricorn Energy (CRNCY) are highlighted for their resilience and potential for long-term growth, particularly in the natural gas and LNG markets, which are seeing increasing global demand.
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