Exxon Mobil (XOM) and Chevron (CVX), the two biggest U.S. oil giants, increased their production during Q3 despite forecasts for a global supply glut and weakening oil prices.
The output hikes threaten to further exacerbate the weakening oil price environment heading into 2026, with the U.S. WTI benchmark hovering near the $60/bbl threshold that companies generally need to maintain profitability – but the biggest producers have more scale to push ahead through lower prices.
Rising output has helped soften the impact of a ~$10/bbl drop in spot prices over the past 12 months.
Exxon (XOM) said in its Q3 earnings report that it achieved another production record of nearly 1.7 million boe/day in the Permian Basin and exceeded 700,000 bbl/day at its operations in Guyana, as the company’s overall production rose to 4.8 million bbl/day from 4.6 million bbl/day in Q2.
“We set yet another production record,” Exxon (XOM) Chairman and CEO Darren Woods said on Friday’s earnings conference call. “Our Permian production continues to grow well into the next decade. It clearly differentiates us from our competitors, who are talking about reduced investments, peak production, or a shift to harvest mode.”
Exxon’s (XOM) execution success was tempered by another increase in debt levels, indicating the company is not covering its dividend and buyback with free cash flow, HSBC analyst Kim Fustier said in a note.
Chevron (CVX) said in its Q3 results that output reached a record 4.1 million bbl/day of oil, up 21% Y/Y, including the integration of Hess, which added nearly a half-million bbl/day to production, but another 227 million bbl/day came from an expansion of its operations at the company’s U.S. and Kazakhstan operations.
Chevron’s (CVX) Permian production continues to grow, producing 60,000 bbl/day above the company’s 1 million bbl/day plateau level.
The U.S. Energy Information Administration has forecast the price of Brent crude oil will average $62/bbl in Q4 and drop further to $52/bbl in FY 2026.
Crude oil futures ticked higher Friday ahead of the OPEC+ weekend meeting that is expected to lead to another production increase in December, with most analysts believing the group will choose a “cautious” output hike of 137,000 bbl/day, in line with increases approved for October and November.
Reports that the Trump administration is considering strikes against military targets in Venezuela gave oil prices a modest lift; President Trump issued a denial on social media.
This week, front-month Nymex crude for December delivery (CL1:COM) closed -0.8% to $60.98/bbl, and front-month Brent December crude (CO1:COM) ended -1.3% to $65.07/bbl; on Friday, the benchmarks rose 0.7% and 0.1%, respectively.
U.S. natural gas futures rose for a third straight session, +3.2% this week to $4.124/MMBtu, as the market turns its focus to coming winter weather and higher demand; on Friday, the front-month Nymex December contract (NG1:COM) gained 4.2%.
ETFs: (USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG), (XLE)
Energy stocks, as represented by the Energy Select Sector SPDR Fund (XLE), finished the week roughly flat.
Top 20 gainers in energy and natural resources in the past 5 days: Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (EDN) +71.9%, Central Puerto (CEPU) +64.6%, Propetro Holding (PUMP) +64.5%, Transportadora de Gas del Sur (TGS) +38.5%, Canadian Solar (CSIQ) +38.4%, Pampa Energia (PAM) +37%, YPF (YPF) +35.2%, Profrac Holding (ACDC) +26.9%, Daqo New Energy (DQ) +25.4%, Vista Energy (VIST) +21%, Uranium Royalty (UROY) +20.6%, Bloom Energy (BE) +19.7%, Geopark (GPRK) +19%, Nuscale Power (SMR) +18.9%, Atlas Energy Solutions (AESI) +17.8%, JinkoSolar (JKS) +16.5%, Cameco (CCJ) +16%, OMS Energy Technologies (OMSE) +16%, North European Oil Royalty Trust (NRT) +14%, Cactus (WHD) +13.5%.
Top 10 decliners in energy and natural resources in the past 5 days: Flux Power (FLUX) -61.4%, VivoPower International (VVPR) -40%, U.S. Antimony (UAMY) -32.8%, Itron (ITRI) -26.2%, Trilogy Metals (TMQ) -25.7%, Sable Offshore (SOC) -21.7%, Empire Petroleum (EP) -21.4%, NexMetals Mining (NEXM) -20.9%, Tigo Energy (TYGO) -18.3%, Lithium Americas (LAC) -18.1%.
Source: Barchart.com