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Featured News from MarketBeat Oil May Be Stronger Than It Looks—And Diamondback Is on SaleAuthored by Chris Markoch. First Published: 9/25/2026. 
Key Points- Diamondback Energy shares have fallen about 11% from their September high due to a Morgan Stanley downgrade, a large insider share sale, and Fed-driven sector rotation.
- Diamondback's Q2 2026 earnings beat estimates with $6.48 per share and 51% revenue growth to $5.56 billion, while management raised production guidance and cut net debt.
- Analysts argue oil prices have a sturdier floor than perceived because of an unresolved Middle East supply gap and rising diesel and petrochemical demand from AI infrastructure buildouts.
- Special Report: Grand Canyon Discovery Reshapes America's Energy Tax Credits.
Oil prices slipped back below $100 this week, and Diamondback Energy (NASDAQ: FANG) shareholders felt the impact. The Permian Basin producer now trades about 11% below its September high. The sharpest blow came on Sept. 16, when FANG fell roughly 8% in a single session.
The prevailing sentiment is that cooling crude prices mean cooling oil stocks. Investors are treating a resolution between the United States and Iran as the end of the energy trade. But that's not the entire story.
Rumors are circulating that Elon Musk is preparing to acquire three publicly traded companies.
Dr. Mark Skousen, who met Musk in person and called the SpaceX listing months early, says he has identified all three targets in what he calls Elon's $2.1 Trillion Hit List.
See the three companies before the rumors become headlines. Get the details on all three companies now Brent crude is still in the high $90s, while West Texas Intermediate sits near $90. The forces supporting elevated oil prices won't disappear when the Iran headlines fade.
The Middle East supply gap is measured in weeks and months, not days. Oil demand is also tied to the AI infrastructure buildout. In addition, a broader wave of grid, construction and manufacturing projects relies on diesel, asphalt and petrochemicals.
Together, those factors point to a higher floor for oil. That doesn't guarantee $100 crude every day, but it does mean the dips may be shallower than the market fears. For investors, Diamondback Energy's sell-off looks more like an opportunity than a warning.
What Actually Took a Bite Out of FANGThe Sept. 16 drop had less to do with oil than it appeared. Three factors hit the stock simultaneously.
Morgan Stanley cut FANG to Equal Weight, arguing that the shares had run ahead of fundamentals.
An investment vehicle tied to Endeavor's founding Stephens family sold more than 9 million shares, a block worth roughly $1.9 billion.
The Fed's rate decision that afternoon pushed money out of energy stocks.
None of those factors changes how many barrels Diamondback produces or what it earns on them. A block sale is a supply-of-shares event, and it's temporary by design.
Wall Street seemed to agree. Within days, Raymond James raised its target to $255, and UBS lifted its target to $253. It's also important to note that FANG trades at about a 20% discount to its consensus price target of $226.33.
Earnings Tell the Real StoryDiamondback's Q2 2026 earnings report shows a business firing on all cylinders. Earnings came in at $6.48 per share, topping estimates by 40 cents. A year earlier, that figure was $2.38. Revenue jumped 51% to $5.56 billion, beating forecasts by about $675 million.
Management also raised its 2026 production outlook by roughly 3% to 4% and cut net debt by $1.6 billion. CEO Kaes Van't Hof said global inventories are draining and will eventually need to be refilled. That's the higher-floor thesis, coming straight from the operator.
The Inventory Scare Is a SideshowThe latest leg lower followed a report from the American Petroleum Institute. It showed an unexpected build of about 1.8 million barrels in U.S. crude stocks. Traders sold first and asked questions later.
But the Energy Information Administration's official numbers haven't confirmed that build. Even if they had, one week of U.S. storage data would say little about a global market this stretched.
The Supply Gap Isn't ClosedSaudi Arabia shut its East-West pipeline on Sept. 11 after drone strikes damaged pumping stations. Since the Strait of Hormuz was disrupted, Riyadh has used that line to reroute about four million barrels per day. That's roughly 4% of global supply. Loadings at the Red Sea port of Yanbu stopped with it.
Aramco restarted the pipeline this week, but at a low rate. A full return could take six to eight weeks. Meanwhile, the Houthis targeted Yanbu again over the Sept. 18-19 weekend. The market is pricing in a quick fix that isn't supported by the realities on the ground.
The Floor Isn't Just About IranInvestors treat oil's premium as a war premium. But a meaningful share of today's demand has nothing to do with the Middle East.
Every AI data center starts as a construction site. Steel, concrete and copper arrive on diesel trucks. Diesel equipment pours foundations and runs cranes. Many facilities rely on diesel generators for backup power. Cable insulation, cooling components and enclosures also rely on petrochemicals.
The AI buildout isn't happening alone, either. Grid upgrades, transmission lines, highway work and reshored manufacturing plants all compete for the same fuel. This kind of demand is sticky. A hyperscaler doesn't pause a multibillion-dollar campus because diesel costs more.
Diamondback also has a direct line into the AI story. On its Q2 conference call, management detailed a power project on its 30,000-acre Bryant Ranch near Midland. Behind-the-meter power could start in the back half of 2027, with grid connection as soon as 2028. Diamondback would supply the gas, land and water. The company hasn’t yet finalized an agreement with a hyperscaler for the Bryant Ranch project. Still, that's the kind of optionality the market isn't paying for today.
What the Chart SaysThe technical picture argues for patience in how investors buy, not whether they buy. FANG trades near $188, below its 50-day moving average of around $199. The MACD sits below its signal line, so momentum hasn't turned yet.
The first support zone is near $180. Below that, the July low near $170 is the level to watch. Scaling in across those levels makes more sense than making a single lump-sum purchase. A close back above the 50-day moving average would signal that sellers are exhausted.
Investors Shouldn't Fear the Volatility in FANGThe perception is that oil below $100 means the energy trade is over. The fundamentals say otherwise. The Middle East supply gap will take weeks to close. AI and infrastructure demand gives crude a sturdier floor than in past cycles. And Diamondback's sell-off came from share supply and a downgrade, not a broken business.
Oil will remain volatile, and FANG will move with it. But volatility around a higher floor creates a buying setup. For investors with a longer view, the dips in Diamondback and other quality oil producers look like opportunities to accumulate. | 
