Oil glut renders industry's appeal purely relative (November 1, 2024)
www.reuters.com

... When there's excess oil, as is the case today, it's easier to pick a winner. Exxon Mobil's (XOM.N), opens new tab balance sheet and diversification make it appealing, but only on a relative basis. The abundance of crude suggests industry returns will only get weaker.

Exxon said it generated $8.6 billion of net profit in the third quarter, as production surged 25% from a year earlier. Much of it is attributable to the $60 billion acquisition of rival Pioneer Natural Resources. Falling commodity prices, however, translated into 5% less earnings.

Rivals Chevron and ConocoPhillips (COP.N) suffered even worse declines, of 31% and 25% respectively, despite extracting more crude.

Gluts augur more of the same.

The Organization of the Petroleum Exporting Countries and its allies are sitting on record spare capacity. Excluding Libya, Iran and Russia, they had more than 5 million barrels per day available within 90 days and which can be pumped for a sustained period, according to the International Energy Agency.

It further estimates that worldwide demand will grow by no more than 1 million barrels per day in 2024 and 2025, while supply rises 1.5 million barrels per day in both years.

Most of the increase comes from beyond OPEC. U.S. production exceeds 13 million barrels per day, and gaining, making it harder for the cartel to trigger a rise in prices.

The bigger problem is waning growth in oil purchases. Electric vehicles will exceed 23% of new car sales this year, according to research outfit Rystad Energy, a proportion that promises to keep swelling. It helps explain why the IEA projects that supply capacity will exceed demand by 8 million barrels a day by 2030. ...

Is the US a bigger oil importer or exporter? (September 2024)
usafacts.org

... The US has been a net exporter of oil and petroleum products since late August 2021.

In 2023, the US exported more crude oil and petroleum products than it imported.

Petroleum and petroleum product exports totaled about 10.15 million barrels per day (b/d), while imports were about 8.53 million b/d resulting in a -1.7 million b/d difference.

Crude oil is a fossil fuel. Petroleum products are made from refined crude oil and include things like jet fuel and gasoline.

Prior to October 2019, the US consistently imported more petroleum and crude oil than it exported. October 2019 was the first month the exports exceeded imports. It's been a net exporter in all but seven months since then. ...

So, if the United States is exporting more oil than it is importing, how is that A Bad Thing.

More specifically, in the context of "drill, baby, drill."

US oil firms unlikely to go 'drill, baby, drill' under Trump, says Exxon executive (November 26, 2024)
www.reuters.com

... U.S. oil and gas producers are unlikely to radically increase production under president-elect Donald Trump as companies remain focused on capital discipline, a senior executive at Exxon Mobil said on Tuesday.

"We're not going to see anybody in 'drill, baby, drill' mode," Liam Mallon, head of Exxon's upstream division, told the Energy Intelligence Forum conference in London.

"A radical change (in production) is unlikely because the vast majority, if not everybody, is focused on the economics of what they're doing," he said.

"Maintaining the discipline, driving the quality, driving the information, will naturally limit that growth rate." ...