U.S. crude oil production has hit a new all-time high, reaching 13.58 million barrels per day in June. This record output, a significant jump from the previous month, highlights the strength and resilience of the American energy sector. The surge came largely from Texas, New Mexico and the offshore Gulf region, all of which are pumping more oil than ever. This growing supply is also helping steady global markets at a time of geopolitical uncertainty.

The rising production is being met with a strong increase in demand, a positive sign for the industry. The total supply of crude and petroleum products, a key indicator for consumption, rose to its highest level since late 2024. This growth was fueled by increased gasoline consumption, which hit its highest point in nearly a year, while jet fuel demand touched levels not seen since 2018. This balance between supply and demand suggests that the U.S. oil market is on solid footing.

This production boom stands to benefit several companies focused on finding and developing crude oil. Firms like Chord Energy ((CHRD Quick QuoteCHRD - Free Report) ), Diamondback Energy ((FANG Quick QuoteFANG - Free Report) ) and Civitas Resources ((CIVI Quick QuoteCIVI - Free Report) ) are well-positioned to capitalize on this output surge. These firms focus heavily on producing oil in the nation’s key basins and have the expertise to maximize returns in a rising output cycle. Their strategies align well with the current industry momentum, making them attractive to watch.

Detailed Insights

The record output reflects more than just drilling harder — it highlights efficiency gains and better technology in places like the Permian Basin. The U.S. has now remained the world’s largest oil producer for six years in a row. The output growth is a result of improved drilling techniques and optimized operations, rather than solely a response to higher prices. From an investor's perspective, this trend is particularly encouraging. The strong performance in oil is a healthy sign for the wider energy sector.

How Can Investors Position Themselves Amid Surging Oil Output?

With production running at a record pace, the focus now shifts to sustainability. While the pace of growth may cool slightly, the industry's ability to boost output efficiently suggests a stable outlook. This momentum, combined with solid domestic demand, bodes well for the energy sector.

Investors interested in the oil/energy space might hold on to some fundamentally strong upstream-focused stocks, such as Chord Energy, Diamondback Energy and Civitas Resources. Each of these carries a Zacks #3 Rank (Hold). These companies' operational expertise and strategic focus on key basins align with the current growth trends, making them compelling players in the market.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Chord Energy: Headquartered in Houston, TX, Chord Energy operates exclusively in the Williston Basin. The company controls approximately 1.3 million net acres across this prolific oil-rich region, producing around 275,000 barrels of oil equivalent per day, of which more than half is crude oil. With over a decade of low-breakeven inventory, Chord benefits from its large contiguous acreage position, which supports efficient long-lateral drilling and strong cost savings. This combination allows the company to sustain free cash flow generation even in volatile commodity price environments.

Management emphasizes disciplined capital allocation and a balanced shareholder-return framework. In the latest quarter, more than 90% of free cash flow was returned to investors through a mix of dividends and share buybacks, with long-term commitment set at 75%+. A best-in-class balance sheet enhances financial flexibility and resilience. Backed by efficient operations, low base decline rates, and a reinvestment-light model, Chord Energy continues to reinforce its position as a premier Williston Basin operator while offering compelling shareholder returns.

Diamondback Energy: It is an independent oil and gas producer headquartered in Midland, TX. Formed in 2007 and public since 2012, the company operates exclusively in the Permian Basin, with about 743,000 net acres in the Midland Basin and 116,000 net acres in the Delaware Basin. Its operations span exploration, development and production, making it a leading player in one of the most prolific oil-producing regions in the U.S. Diamondback also owns a more than 50% stake in Viper Energy Partners, enhancing its portfolio with mineral interests and infrastructure assets.

At the end of 2024, Diamondback reported proved reserves of 3,557 million barrels of oil equivalent, with 50% oil and 67% developed. The company’s production mix is among the oilier in the U.S., at roughly 58%. Management’s disciplined capital allocation strategy and industry-low cost structure allow steady free cash flow generation through cycles.

Civitas Resources: Civitas Resources is an independent exploration and production company headquartered in Denver, CO. Established in 2021 through the merger of Bonanza Creek Energy, Extraction Oil & Gas, and Crestone Peak Resources, the company has since expanded into both the DJ Basin of Colorado and the Permian’s Midland and Delaware Basins. With 357,000 net acres in the DJ, 109,000 in the Midland, and 32,000 in the Delaware, Civitas operates across some of the most productive shale regions in the United States.

The company maintains a balanced production mix of roughly 47% oil, 28% natural gas, and 25% NGLs, producing 317 thousand barrels of oil equivalent per day as of the latest quarter. Management has emphasized debt reduction, but shareholder returns remain a priority through a steady base dividend and opportunistic buybacks. Backed by strong free cash flow generation and disciplined operations, Civitas is positioning itself as a producer with scale, efficiency and a growing footprint across two core U.S. basins.