Will Crescent Energy Gain if the Federal Reserve Cuts Rate Next Month?

For shale explorers like Crescent Energy (CRGY), a lower interest rate environment tends to stimulate broader economic activity, which, in turn, boosts oil demand and prices, apart from reducing their borrowing costs. To this end, it is imperative to mention that the U.S. Federal Reserve Chief has recently hinted at a possible cut in the country’s interest rate at the Fed meeting next month, with market consensus reflecting a more than 80% chance of a Fed rate cut in September (as per a recent article by Morgan Stanley).

However, a simple rate cut is unlikely to single-handedly reverse the broader downward trend in oil prices, as expected by the nation’s major organizations. Evidently, the U.S. Energy Information Administration (“EIA”) projected in its latest short-term Energy Outlook report that the Brent crude oil price is estimated to decline significantly in the coming months — from $71 per barrel (b) in July to $58/b on average in the fourth quarter of 2025 and around $50/b in early 2026.

Notably, this price forecast is driven largely by more oil inventory builds following OPEC+ members’ decision to accelerate the pace of production increases, which is unrelated to America’s interest rate movement.

In addition, geopolitical factors — such as the United States pressuring India to cut its oil purchases from Russia by imposing higher tariffs and a 25% penalty — combined with ongoing global trade uncertainty driven by the United States’ recently heightened tariff regime, have the potential to significantly hurt demand for oil from America. This, in turn, can further contribute to lower U.S. oil prices and thereby impact Crescent Energy's revenues from oil sales in the coming quarters.

Other Stocks Warranting a Look

CRGY apart, other U.S. shale explorers like Chevron (CVX) and Exxon Mobil (XOM), are also facing the brunt of operating in this nation and thus remain vulnerable to declining oil prices.

Chevron’s operations span approximately 1.8 million net acres in the Delaware and Midland sub-basins, leaving the company exposed to a softer crude pricing environment. Its second-quarter 2025 earnings dropped 40% year over year, with lower oil prices being one of the primary reasons behind the fall.

Declining oil prices have been adversely impacting ExxonMobil’s upstream business. Exxon Mobil’s year-to-date earnings as of June 2025 declined notably from the year-ago figure due to weak crude prices.

The Zacks Rundown for CRGY

Shares of Crescent Energy have risen 32.6% in the past year compared with the industry’s growth of 12.8%.

From a valuation standpoint, CRGY is currently trading at a forward 12-month earnings multiple of 6.66, a discount when stacked up with the industry average of 21.26.

The Zacks Consensus Estimate for CRGY’s near-term earnings has moved north over the past 60 days.

CRGY stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 

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This article originally published on Zacks Investment Research (zacks.com).

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