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.
For further details see:
Why Isn't U.S. Oil Production Growing More?