Raw materials producers do not want to drill
Wall Street forecasts that fOil and gas IRMs will significantly limit investments in 2025, focusing on maximizing margins and profits for shareholders. For several years, the industry has been trying to increase production efficiency at the expense of production capacity. He focuses on new technologies, which investors expect.
Muffled oil prices
The challenge for producers is the suppressed demand for raw material, which is a derivative of EU or China in the stagnation. This is confirmed by research on the condition of the industrial sector. In the USA, the ISM index for industry has been in a recession for almost two years (reading below 50 points). Recently, the industrial sector in China (data for January) also entered the shrinking phase. In Europe, the largest economic locomotives, i.e. Germany and France, are currently in stagnation (GDP growth oscillates around zero). This means that The demand for raw materials is still suppressed in the largest economies of the world.
This can be seen strongly in price forecasts. The price of Brent oil is expected to be an average of $ 74. For a barrel of oil this year, which means a decrease compared to the average price in 2024 ($ 81 per barrel) – we read in Reuters.
Production plans of American oil tycoons
What are the plans of mining companies and responsible for research on raw material investments in the US? Companies plan to increase production this year by only 5%, On the other hand, investment expenditure is to be the same as in the previous year or even a little lower – Scotiabank analysts believe.
The only exception is Exxon Mobil, which plans to significantly increase production. The largest American oil company intends to more than triple its shale gas production and extract 1.3 million barrels of oil per day from deposits in Guyana. As for Chevron, it is to increase production by only 3%this year, and the increases in 2026 are to remain one -digit – Barclays expects.