ExxonMobil Production Soars 24%! Oil Giants Face Explosive Risks of Plummeting Oil Prices

In the most recent quarter, ExxonMobil's oil and gas production achieved significant year-over-year growth of 24%. At the same time, Chevron also posted a 7 percent increase in production. Shell of the Netherlands and BP of the UK achieved production growth of 4% and 2% respectively. Macquarie believes that if OPEC production resumes and new supplies from places like Brazil join the market, the price of Brent crude oil could fall below the $70 mark.

At the same time that OPEC is considering increasing production, European and U.S. oil majors are reporting big increases in production, which creates more downside risks for oil prices. In their latest quarterly earnings reports, oil majors such as ExxonMobil and Chevron said they had achieved varying degrees of production growth. Specifically, ExxonMobil's oil and gas production grew 24% year-over-year, driven by its $60 billion acquisition of Pioneer Natural Resources. Chevron's production rose 7 percent, and even though the company cut capital spending in half, its oil and gas production is still 27 percent higher than it was a decade ago. Shell of the Netherlands and BP of Britain increased production by 4 percent and 2 percent, respectively, despite having more aggressive net-zero emissions targets than their U.S. counterparts.

The biggest contributor to the growth in U.S. oil majors' production came from the Permian Basin. Crude oil production from the region hit a record high in the third quarter, with analysts pleasantly surprised by the year-on-year growth and efficiency gains. The general increase in output by the giants has put more pressure on oil prices. Flagging global demand for crude has driven oil prices down 12 percent over the past six months, and prices could fall further if OPEC follows through with its plan to restore previous production cuts.

Nick Hummel, an analyst at Edward D. Jones & Co in St. Louis, said: "ExxonMobil and Chevron are sticking to their core oil and gas strategies while scaling up production in some of the best assets in the world. The short-term outlook for oil and gas is weak, especially as OPEC prepares to put more oil on the market."

It follows news that OPEC plans to add oil to the market from December, restoring 180,000 barrels per day as originally planned. But there are also analysts who believe that rising U.S. production, which is currently about 50 percent higher than Saudi Arabia's, could prevent OPEC from increasing production.

Macquarie said in a report that this oil, combined with new supply from Guyana, Brazil and elsewhere, could mean "5 million barrels per day of production capacity by 2025 that is not being produced today". This was against a backdrop of "relatively weak" demand growth, they said. It expects Brent crude to fall below $70 a barrel from its current level of about $73, barring a major geopolitical event.