Big Oil begins reporting fourth-quarter results this week,
and outlooks for the coming year should reflect the dissonance between Trump's
oil and gas-maximizing agenda and investor expectations. The industry has
pushed in recent years to drive down costs and increase production by using
more efficient technology rather than drilling many new wells.
Producers also must contend with lower global oil
prices as the post-pandemic demand rebound runs its course and as China's
economy struggles.
Benchmark Brent crude oil prices are projected to average US$74
per barrel in 2025, down from US$81 in 2024, according to the US Energy Information
Administration.
Overall,
for the US exploration and production sector, analysts at Scotiabank expect
companies to target up to 5% production growth this year, and flat to slightly
lower year-over-year capital expenditures.
The exception is Exxon Mobil, which plans a large increase in
production. The largest US oil company intends to more than triple its
production in the Permian, the top US shale field, and pump 1.3 million barrels
per day from its lucrative operations in Guyana by 2030.
"We expect most oil and gas producers to remain
disciplined with capital expenditures," said Rob Thummel, senior portfolio
manager at Tortoise Capital. "However, less regulation will make it easier
to increase drilling activity if commodity prices reach levels that are too
high."
Chevron, which reports results on Friday, is expected to
grow production by about 3% this year and in the mid-single digit percentage in
2026, said Barclays analysts in a research note.
The company has followed a conservative strategy, moving out
of a phase of heavy investment in new projects, and is now generating cash,
said analysts from RBC Capital Markets in a note. Chevron could also announce a
dividend increase of at least 5% over the previous year.
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