Permian Stocks Poised to Gain as Oil Prices Remain Elevated
The ongoing Middle East conflict has pushed oil prices above $80 per barrel, causing uncertainty in the stock market. However, energy stocks are still attractive, particularly those operating in the Permian Basin.
According to the U.S. Energy Information Administration (EIA), West Texas Intermediate (WTI) crude is trading at $80.88 per barrel this year, higher than last year's $65.40. The high prices are expected to continue supporting exploration and production activities in the Permian Basin.
The EIA projects total crude oil production in the Permian will be 6.78 million barrels per day this year, up from 6.60 million barrels per day last year. This increase is likely to boost the bottom lines of explorers and producers operating in the basin.
Three Permian players that are well-positioned to gain from the ongoing strength in oil prices are Diamondback Energy (FANG), ExxonMobil Holdings Corporation (XOM), and Chevron Corporation (CVX). These companies have a strong footprint in the Permian and have been employing advanced drilling techniques to boost production while reducing capital spending.