Chevron plans to cut capital spending and still produce more oil

Chevron plans to cut spending and still produce more oil.

The oil-drilling giant announced Tuesday that it is reducing its capital expenditure budget for 2017-2018 to a range of $17 billion to $22 billion from $20 billion to $24 billion.

Chevron maintained its forecast for production growth through 2020, as several projects that have been in the works for several years finally come online.

In the statement, CEO John Watson said, "Industry conditions are tough right now, with low oil and natural gas prices. We believe markets will improve, and we'll be well positioned when they do."

The company is holding its analyst meeting on Tuesday.

Its shares were little changed in pre-market trading on Tuesday. They have fallen 12% over the past year.

Last week, ExxonMobil also announced cuts to its capital spending plans, while still planning to launch new drilling projects over the next two years.