Tortoise Senior Portfolio Manager Rob Thummel in CNBC

U.S. oil is back, and ExxonMobil’s $60 billion deal isn’t even the biggest signal

  • Domestic oil production hit an all-time high last week, marking a full recovery from the Covid pandemic after drilling had dropped more than 25% between pre-Covid peaks and a bottom in early 2021.
  • The comeback is being driven by the Permian Basin in Texas, where ExxonMobil is now consolidating its position with a $60 billion acquisition of Pioneer Natural Resources, and which has low production costs per barrel and easy pipeline access that pays off faster than offshore drilling.
  • For years, Wall Street has pushed oil and gas companies to cut capital spending and boost buybacks and dividends, but production has risen about 3 million barrels/day from the bottom, and could rise by nearly 1 million more by 2025.
  • After three and a half years, a tripling in the S&P 500 Energy Index, and many soon-to-be-forgotten culture-war volleys, the U.S. Department of Energy announced Oct. 12 that U.S. crude oil production had hit an all-time high of 13.2 million barrels per day, entirely wiping out Covid-era losses of more than 3 million barrels per day.

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