Permian Stocks Poised for Gains as Oil Prices Remain Elevated

The ongoing conflict in the Middle East has driven oil prices higher, and they're currently hovering around $90 per barrel. According to the U.S. Energy Information Administration (EIA), West Texas Intermediate crude is expected to remain at this elevated level for the rest of the year.

Permian stocks are well-poised to gain from these high oil prices. The Permian basin in the United States is the most prolific, and total crude oil production there is estimated to be 6.76 million barrels per day this year, up from 6.57 million last year.

Diamondback Energy (FANG), ExxonMobil Holdings Corporation (XOM), and Chevron Corporation (CVX) are among the key players in the Permian. Diamondback has a huge drilling site with an estimated 8,854 gross locations, making it economical even at lower oil prices. ExxonMobil has employed lightweight proppant technology to boost well recoveries.

Chevron also has a strong footprint in the Permian and has been able to generate more production while using lower capital spending due to advanced drilling techniques.