Oil has been trading around $65–$66 per barrel lately, after OPEC+ announced only a modest production increase for November. That kept prices from collapsing further, but it didn’t reverse the downtrend. The reality is that weak demand, oversupply pressure, and strong non-OPEC production are weighing heavily on the market. What’s even more concerning is that this doesn’t look like a simple cyclical dip anymore. Demand itself might be structurally changing. With global economic growth slowing and energy transition accelerating, this could be the beginning of a longer, historic shift.
As a small investor in oil and gas stocks, including Exxon, this is unsettling. Exxon has already said price fluctuations could impact its upstream earnings by a few hundred million dollars, and refining margins may offer some cushion. But the real issue is that if oil stays at these levels or declines further, dividends and buybacks - the very things that keep income investors like me holding these stocks - may no longer be sustainable. Analysts are openly flagging Exxon and other majors as vulnerable on this front. If this turns out to be a structural demand slide, not just a temporary slump, the old safety net of “big oil = stable dividends” may not hold. That’s a sobering thought for anyone relying on these stocks for steady returns.