Despite crude oil price declines in the fourth quarter, 2018 was the most profitable year for U.S. oil producers since 2013 (4/17/2019)

Net income for 43 U.S. oil producers reached a five-year high in 2018, totaling $28 billion. Based on this metric, 2018 was the most profitable year for these U.S. oil producers since 2013, despite average West Texas Intermediate (WTI) crude oil prices that were $33 dollars per barrel (b) lower in 2018 than in 2013, as well as an approximate 40% within-quarter decline in prices in the fourth quarter. Lower production costs per barrel of oil equivalent (BOE) and increased production levels contributed to the highest return on equity—defined as the $28 billion in net income generated as a share of average shareholder equity—for the fourth quarter of 2018 than any quarter in the 2013–18 period. As a result of higher net income, more companies have been funding investments through cash from operating activities, meaning that these producers are relying less on outside sources of capital for new exploration and development. ... More »