![]() The other thing keeping US production in check: investors seem to be reluctant to invest in fossil fuel stocks. “2020 is still fresh in their minds….They’re still scarred.” “They’re more confident we don’t have to worry about a bust, they’re not uncorking the champagne,” McNally said. The early days of the pandemic drove oil briefly to negative pricing, resulting in a spate of bankruptcies across the industry. Experts say the industry is unlikely to get back to that pre-pandemic level this year - and that the last decade’s rapid increases in US oil production, typically double-digit percentages year-over-year, are probably a thing of the past.Īnother factor likely making oil companies cautious about investing too much, too fast is 2020’s oil bust. They’re just not available.”Īs a result, US oil production is just under 12 million barrels a day, 8% lower than in 2019. “It’s not like they’re available at a premium price. ![]() “They can’t find people, and can’t find equipment,” said Robert McNally, president of consulting firm Rapidan Energy Group. They’re also having trouble sourcing some of the equipment they would need to ramp up production, including pipes and specialized sand used in fracking to extract shale oil. Like many industries during the pandemic, oil producers are struggling with a shortage of workers. But several issues are stopping these companies from scaling up production. ![]() Making more US oil could net a tidy profit for producers while lowering prices at the pump for drivers. And other major producers like Saudi Arabia have indicated they won’t fill the global supply gap. On the face of it, it’s an ideal time for US firms to cash in on high prices after Russia’s invasion of Ukraine: Traders are nervous about purchasing Russian oil due to uncertainty about the situation, though those exports aren’t subject to current sanctions. Oil prices are soaring to seven-year highs, but don’t expect US oil producers to ramp up supply. ![]()
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