US Shale Industry To Keep Forced Output Limits

The US shale industry confirmed it will keep self-imposed production limits in order to prioritize profits, despite elevated oil prices and uncertainties over Russia.

• The reason behind the forced production limits are labour shortages, high equipment costs and a lack of government support, producers said during earning calls in the past weeks.
• The industry has seen little, or no output increases this year as US shale drillers have altered their capital allocation discipline, to prioritize shareholder return after burning through cash during the Covid-19 pandemic.
• It is unlikely US shale production will return to pre-Covid production levels in the next years.
• Occidental plans to keep its production flat in 2023, and Devon anticipated output growth next year at the lower end of previous forecasts of 0-5% growth.