Permian Operations to Drive Resilience for These 3 Oil Stocks in 2026

Core Insights - The Permian Basin is the most productive oil and gas region in the U.S., significantly contributing to the country's energy supply and economic stability [1][3] - Advanced drilling techniques have made operations in the Permian economically viable, even in low oil price environments, making it attractive for upstream players [2][5] Production Projections - The U.S. crude oil production is projected to increase by 1.9 million barrels per day from 2020 to 2024, with 93% of this production coming from just 10 counties in Texas and New Mexico, all located in the Permian Basin [3] - The EIA forecasts that Permian crude oil production will reach 6.56 million barrels per day in 2026, surpassing the estimated 6.54 million barrels per day for 2023 and 6.28 million barrels per day for 2024 [4] Price and Cost Dynamics - Despite expectations of declining oil prices, with the EIA projecting an average price of $51.42 per barrel for next year compared to $65.32 per barrel this year, production in the Permian is expected to rise due to low operating costs [5][10] - Companies operating in the Permian, such as Diamondback Energy, ExxonMobil, and Chevron, have low breakeven prices, allowing them to remain profitable even if oil prices fall to $50 per barrel [7][10] Company-Specific Insights - Diamondback Energy has a significant presence in the Permian with approximately 9,600 gross drilling locations, which are economically viable even at lower oil prices [7] - ExxonMobil is enhancing its production capabilities in the Permian through advanced technologies and strategic acquisitions, such as Pioneer Natural Resources, which is expected to contribute to long-term growth [8] - Chevron has a strong operational footprint in the Permian, managing to increase production while reducing capital expenditures through advanced drilling techniques [9][11]