The U.S. has become the world’s leading oil producer, and investors are struggling to analyze the new dynamics
The U.S. now pumps out roughly 12.5 million barrels a day, according to data from the U.S. Energy Information Administration. The country posted a record trade surplus in petroleum products in September and sent oil to a record number of destinations world-wide earlier this year.
Rob Thummel, senior portfolio manager at energy investment firm Tortoise, said lower crude prices have forced him to focus his investments on producers that can keep costs low and have easy access to export hubs like the Gulf Coast, like some producers in the Permian Basin. This year, his firm dropped its investments in Whiting Petroleum Corp. , which focuses on North Dakota’s Bakken Shale, and increased holdings in Permian-focused producers like Pioneer Natural Resources Co.
Highlighting the changes, crude futures jumped 15% following September attacks on Saudi Arabia’s oil facilities in their biggest one-day move on record, a surge that underscored the kingdom’s ongoing role as the world’s top exporter. Then they quickly returned to pre-attack levels as investors bet that weak demand and rising production in the U.S. and elsewhere could make up for any shortfall from the Middle East.
The U.S. now produces more oil than any other country in the world, surpassing output from both Saudi Arabia and Russia in 2018. Exports began ramping up after Congress agreed in 2015 to lift a 40-year ban, allowing the country’s oil producers to sell the fruits of the fracking boom globally.
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