OPEC Starting to Feel the Sting of U.S. Oil Production

In the past several years, the U.S. has grown its oil production at the fastest rate since the 1960s, and the country was the fastest-growing oil producer in the world between 2011 and 2012. For a while, OPEC hasn't been sweating the threat of U.S. production. Only a couple months ago its leaders announced that it has no plans to change its production volumes despite the change in the global oil landscape. Well, that idea has been completely turned on its head: OPEC recently announced that it is considering a plan to cut its output ceiling by 500,000 barrels per day by the end of the year in order to keep oil prices at profitable levels for the oil cartel. 

In some ways this is a feel-good story for American energy production, but what does it actually mean for the energy space? For one thing, it is a sign that oil prices will probably remain high for a while longer, which should be a relief for companies with major exploration and development projects going on. Chevron (NYSE: CVX  ) recently said that it saw a drop in production in part due to lower oil prices, so a reduction in OPEC's output could be a good sign for Chevron and its peers as they try to bring their major projects to fruition. Tune into the video below where Fool.com contributor Tyler Crowe looks deeper into why OPEC is reconsidering the surge in U.S. production, and highlights some of the companies that could benefit from this move. 

With so many players vying to get a piece of the American energy pie, finding the right plays among the crowd could help pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. Let us help you discover these companies by checking out the special free report, "3 Stocks for the American Energy Bonanza." Simply click here to access your report -- it's absolutely free. 


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  • Report this Comment On July 18, 2013, at 10:50 PM, MightyMinnow wrote:

    One more positive thing about the U.S. oil explosion is that gas money stays home and circulates. The feds aren't going to cut rates, to keep gas prices down, as long as the easy money stays home. The feds & states get a piece of the gas flow on a % rate.

    Opec can cut production, and give the U.S. more volume @ a higher price, or increase it and give us cheap oil. There going to pump pump pump.

    My plan is to buy stock in anything to do with trucks/SUV's/16 wheelers. I hate to tell someone to buy GM but I think them Cadillac's, and 22-25 mpg trucks/suv's are going to move. BMW & Toyota too.

  • Report this Comment On July 19, 2013, at 8:12 AM, savage393 wrote:

    How can they be feeling the pinch? WTI crude prices are at a 6 month high. They must really be suffering. Maybe the Saudi's will just buy one less Mercedes this year.

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