Trump Said 'Drill, Baby, Drill': Oil Companies' Answer At $55 Crude, 'We Can't'

Benzinga_recent_news12-18 03:31

When Donald Trump took the presidential oath of office in January 2025, he made his energy agenda unmistakably clear, vowing to unleash American oil production under the rallying cry, "Drill, baby, ...

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Here's how Trump's energy push is impacting shale stocks and survival odds.","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0787776722.HKD":"AB SELECT US EQUITY PORTFOLIO \"A\" (HKD) ACC","BK4585":"ETF&股票定投概念","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","LU0130517989.USD":"HARRIS ASSOCIATES US VALUE EQUITY \"R\" INC","EOG":"依欧格资源","IE00B3CCJ963.GBP":"GUINNESS GLOBAL ENERGY \"C\" (GBP) ACC","LU0742534661.SGD":"Fidelity America A-SGD (hedged)","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","BK4566":"资本集团","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","IE00B2Q91V27.USD":"GUINNESS GLOBAL ENERGY \"C\" (USD) ACC","BK4213":"石油与天然气的勘探与生产","LU0266512473.USD":"JPM GLOBAL NATURAL RESOURCES \"C\" (USD) ACC","LU0788109394.HKD":"BGF WORLD ENERGY \"A2\" (HKDHGD) ACC","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","IE00BGHQF524.EUR":"GUINNESS GLOBAL ENERGY \"C\" (EUR) ACC","LU0456854461.SGD":"JPMorgan Funds - Global Natural Resources A (acc) SGD","LU0300736492.USD":"FRANKLIN NATURAL RESOURCES \"A\" (USD) INC","LU2237438978.USD":"Amundi Funds US Pioneer A2 (C) USD","BK4559":"巴菲特持仓","LU0477156953.USD":"HARRIS ASSOCIATES US VALUE EQUITY \"RE\" (USD) ACC","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0300736062.USD":"FRANKLIN NATURAL RESOURCES \"A\" (USD) ACC","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","FANG":"Diamondback Energy","LU0251131958.USD":"FIDELITY AMERICA \"A\" (USD) ACC","LU0122376428.USD":"贝莱德世界能源基金A2","LU0251142724.SGD":"Fidelity America A-SGD","BK4588":"碎股","OVV":"Ovintiv Inc.","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","MUR":"墨菲石油","LU0683600562.USD":"AB SELECT US EQUITY \"A\" (USD) ACC","LU0368265418.SGD":"Blackrock World Energy Fund A2 SGD-H","LU0256331488.USD":"SCHRODER ISF GLOBAL ENERGY \"A\" ACC","BK4201":"综合性石油与天然气企业","LU0266512127.USD":"摩根大通环球自然资源 A(acc)"},"translate_title":"特朗普说“钻，宝贝，钻”：石油公司的回答是原油价格为55美元，“我们不能”","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"OVV":1,"FANG":1,"MUR":1,"EOG":1},"content_text":"When Donald Trump took the presidential oath of office in January 2025, he made his energy agenda unmistakably clear, vowing to unleash American oil production under the rallying cry, \"Drill, baby, drill.\"\n       • State Street Energy Select Sector SPDR ETF stock is building positive momentum. What’s driving XLE shares up?\nFew could have anticipated how quickly that promise would begin reshaping the energy market, or the unintended consequences that would emerge less than a year later.\nDeclaring a national energy emergency during his Jan. 20 inaugural address, Trump blamed inflation on \"massive overspending and escalating energy prices,\" pledging to accelerate domestic drilling and tap what he called the nation's vast reserves of \"liquid gold.\"\nFast forward to mid-December 2025, and oil prices are hovering near $55 a barrel — the lowest level in nearly five years and down roughly 25% year-to-date.\nWhile cheaper oil has delivered relief to consumers, it has also introduced a new problem: at these prices, pumping crude is no longer profitable for a large segment of U.S. producers. \nThe result is growing concern that parts of the domestic oil industry could be forced to scale back or shut down altogether.\nU.S. energy stocks sold off sharply this week as oil slipped to the $55 level, setting off warning signals across Wall Street research desks.\nThe Energy Select Sector SPDR Fund (NYSE:XLE) tumbled 3% on Tuesday, marking its worst session since late June. \nAccording to a December 2025 survey by the Dallas Federal Reserve, when WTI crude falls below $61 per barrel, most U.S. oil companies struggle to profitably drill new wells. \n\"Only large independents or oil majors can sustain production levels in a lower price environment,\" Johannes Rauball, crude oil analyst at Kpler, told Benzinga. \n\"The average U.S. breakeven, if everyone is treated equally, is slightly above $60 per barrel, so it does impact quite a few players,\" Rauball added. \nSmaller private producers are particularly vulnerable, he noted, as they lack the scale and access to advanced technologies that allow larger firms to operate more efficiently at lower prices.\nEnergy analyst Jeff Krimmel, founder of Krimmel Strategy Group, told Benzinga that while some operators can still turn a profit with oil below $50 per barrel, others face mounting pressure.\nAccording to Krimmel, companies such as EOG Resources (NYSE:EOG) and Diamondback Energy (NASDAQ:FANG) have \"plenty of room to spare\" even if oil prices fall below $50 per barrel.\nBy contrast, Ovintiv (NYSE:OVV), Marathon Oil (NYSE:MRO), Murphy Oil (NYSE:MUR) and Occidental Petroleum (NYSE:OXY) would likely report losses at or below that level.\n\"I'd expect EOG and Diamondback to have more optionality in this lower oil price environment than Murphy and Occidental do,\" Krimmel told Benzinga.\nLooking at the broader market, Krimmel indicated that oil markets have been in surplus for most of 2025 — a condition expected to persist through much of 2026. \n\"I would argue prices reflect this reality,\" he said. \"This market dynamic is well known and often discussed.\" \nStill, Krimmel believed sentiment turned broadly bearish, leaving room for a rebound. \n\"If I had to guess whether the next five-dollar move is up or down, I would guess it's up,\" he said. \"Even small positive surprises could move oil prices back up from here.\"\nKrimmel also addressed whether oil markets are factoring in the possibility of a Russia-Ukraine peace deal.\n\"I believe a near-term peace deal is priced into markets,\" he said, noting that investors are closely watching the Trump administration's efforts to broker an end to the conflict.\n\"With President Trump so personally involved, I think markets believe some form of peace will materialize in the near term,\" Krimmel said. \nAccording to Polymarket, traders are currently assigning just a 25% probability that a Russia-Ukraine peace deal will be signed by March 31, 2026.\nFor now, oil at $55 is testing the limits of U.S. shale, revealing which producers can endure a prolonged downturn, and which may not survive the consequences of \"drill, baby, drill.\"\nRead Now: \nPhoto: Shutterstock","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; 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