Somewhat more disconcerting is that 2003 marked ChevronTexaco's fifth consecutive year of worldwide declines in production. In part, though, the drops stem from its increasing move away from U.S. production toward development of foreign energy sources. Political and social unrest in Nigeria and Venezuela, for example, disrupted production in recent years. Nonetheless, overseas exploration is vital to the oil giant's long-term future. Its 2003 proven reserves, while down slightly from 2002, remain massive thanks to foreign sites.
The increasing reliance on energy from unstable environments bears continued watching, but ChevronTexaco's announcement last month that it soon will bring Nigerian production back online and recent conciliatory remarks by Venezuelan President Hugo Chavez are near-term positives. In fact, the stars appear to be aligning for the whole oil industry. As W.D. Crotty noted in January, ChevronTexaco and other oil companies -- including Imperial Oil
Perhaps most significantly, pricing trends for the industry look bright. The U.S. Energy Administration forecasts average monthly gasoline prices will reach record highs this spring. As long as oil companies continue to close domestic refineries, the cycle of ever-increasing price spikes is likely to continue. In addition, China's growth as an oil importer, cited as one of the causes of the current price jump, will probably add to future price hikes.
Of course, rising gasoline tabs might eventually lead U.S. lawmakers to pass a national energy policy. But should it become law in the near term, whatever form this legislation might take, it's hard to believe it won't benefit the oil companies in some way. The U.S.'s continued dependence on fossil fuels means oil is here to stay, a maxim investors should take to heart.
Fool contributor Brian Gorman is a freelance writer in Chicago, Ill. He does not own shares of any companies mentioned in this article.