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AMND - Why Isn't U.S. Oil Production Growing More?
UBS AG ETRACS Alerian Midstream Energy High Dividend Index ETN
Summary
US producers have demonstrated that they are capable of significant growth at a lower oil price level, so it can be baffling that production is not growing more at higher prices.
Despite ample reserves, significant industry expertise in shale production, and financial incentive from higher oil prices, US oil production is only growing modestly for several reasons.
For energy infrastructure corporations and MLPs, modest US production growth is arguably a goldilocks (or just right) scenario as it requires moderate capital spending and supports ongoing free cash flow generation.