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The industry is bracing for the OPEC Plus oil cartel’s meeting on Saturday, which is widely expected to further increase oil production despite weak demand.
May 30, 2025Updated 11:52 a.m. ET
U.S. oil companies are pulling back as lower commodity prices take a toll.
After two months of crude oil prices hovering around $60 a barrel, companies are shutting down drilling rigs and laying off workers as they pare spending. It now appears very likely that U.S. oil production will not grow much this year, if at all.
There are two main reasons for low oil prices. President Trump’s trade war is likely to slow the global economy, hurting demand for fuel. And OPEC Plus, an oil cartel led by Saudi Arabia, is increasing production of oil as demand is softening.
On Saturday, eight members of the cartel are widely expected to announce plans to bring even more oil to market this summer, which could send prices lower still.
American oil companies are not waiting to find out.
While Exxon Mobil and Chevron are maintaining their spending plans, smaller companies are pulling back. Those focused on drilling for oil now plan to spend around 3.5 percent less this year than previously planned, according to a BloombergNEF analysis of a dozen publicly traded companies. All things equal, more drilling tends to drive oil prices down and less drilling generally props them up.
“We can’t run our program on hope,” Tom Jorden, chief executive of the oil and gas producer Coterra Energy, told analysts during an earnings call this month. “So we are battening down the hatches, expecting this to last for a while.”
The Houston-based company said it would drill less in the Permian Basin of Texas and New Mexico, the top U.S. oil field, and more in the Northeast, which is rich in natural gas. Prices for that fuel, used in power plants and for heating, have been much more resilient.
