US To Drive Global Oil Production Growth In The Next Decade
Zacks Investment Research | Jun 26, 2019 09:29PM ET
The United States is expected to lead global oil output growth for the next 10 years. This view has been expressed by the chief economist of ConocoPhillips (NYSE:COP) , Helen Currie, to S&P Global (NYSE:SPGI) Platts. Moreover, she expects tight oil to grow beyond 2030s and U.S. crude exports to boom.
Shale Dominance
Currie believes that production of tight oil, otherwise known as shale oil, will keep growing even after 2030s, despite the prices remaining moderate. This could give the United States an advantage over other crude-producing countries. The primary reason behind the dominance of tight oil, even in a moderate price environment, is significantly low cost of production at shale plays like Permian and Williston Basins, Eagle Ford Shale, and others. Experts say that it is cheaper to drill and complete oil wells in the Permian Basin compared with other major fields.
Markedly, buying stocks that have immense presence in the Permian will definitely be beneficial for investors in the long run. Per GlobalData Energy, companies like EOG Resources, Inc. (NYSE:EOG) , Exxon Mobil Corporation’s (NYSE:XOM) subsidiary XTO Energy, Pioneer Natural Resources Company (NYSE:PXD) and Chevron Corporation (NYSE:CVX) have one of the lowest breakeven prices in the region. At lateral lengths in the range of 7,560-10,500 feet, these companies have breakeven prices of less than $26 per barrel. In comparison, the lowest WTI Crude benchmark reached over the past year was near $40 per barrel toward 2018-end.
Chevron currently has a Zacks Rank #1 (Strong Buy), while EOG Resources, ExxonMobil and Pioneer Natural carry Zacks Rank #3 (Hold). You can see Zacks Investment Research
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