Crude Oil Prices Face Pressure as Supply Surplus Continues

Crude oil prices are expected to remain under pressure as the U.S. Energy Information Administration (EIA) forecasts a persistent supply surplus into 2026. The EIA predicts that crude oil prices could average around $55 per barrel in the first quarter of the year, a situation that poses challenges for the oil and gas industry. As a result, stocks in this sector are likely to reflect the ongoing struggles of oil prices. Nevertheless, investors with a long-term perspective may find potential opportunities in lesser-known energy companies that are well-positioned to benefit from future market recoveries.

Energy Companies to Watch Amidst Price Declines

Given the challenging outlook for crude oil, three energy companies stand out for their potential to navigate the current landscape effectively.

Expand Energy Corp., primarily focused on liquefied natural gas (LNG), has shown resilience despite the broader market’s struggles. Throughout 2025, the company’s shares only returned 6.5% against the S&P 500’s 17.2%. However, Expand Energy’s strong quarterly performance, exceeding analyst earnings per share (EPS) estimates by nine cents and generating nearly $1 billion above revenue predictions, highlights its operational success. Key factors contributing to this performance include expanded production, strategic acquisitions in the Western Haynesville region, and reduced well costs. Analysts are optimistic, with expectations for EPS to quadruple to $5.48 in the coming year. Consequently, 19 out of 22 analysts recommend the stock as a Buy, forecasting a 20% upside potential.

Mach Natural Resources LP, an Oklahoma-based upstream firm, is also adapting to the shifting market dynamics. After experiencing a 35% decline in share price this year, bringing its price-to-earnings (P/E) ratio down to 11.75, the company is pivoting towards increased natural gas production. As production ramps up in the Anadarko and Mancos regions, management expects to further reduce well costs in 2026. Although the transition has impacted the company’s dividend yield and payout ratio, executives reaffirm their commitment to returning value to shareholders. Analysts predict a strong recovery, with share prices projected to double, exceeding $22 each.

Archrock’s Steady Growth Amid Energy Demand

In contrast, Archrock Inc., based in Houston, focuses on providing equipment to the oil and gas sector. Despite returning just over 1% year-to-date, Archrock is well-positioned to benefit from the growing demand for energy, particularly in natural gas. Recent earnings show a remarkable 50% year-over-year increase in adjusted EPS, driven by high fleet utilization and improved operational efficiency. Furthermore, Archrock has consistently raised its dividend over the past year, demonstrating its dedication to maximizing shareholder value.

As the energy landscape continues to evolve, these companies may offer compelling investment opportunities for those willing to navigate the current challenges in the oil and gas market. While short-term pressures are expected to persist, the strategic moves of Expand Energy, Mach Natural Resources, and Archrock position them well for potential recovery as market conditions improve.