Frackers Constrained by Investor Payouts, Inflation, and Interest Rates as Oil Prices Rise

Oil prices are rising, with some analysts predicting that they could soon hit $100 a barrel13. However, U.S. shale companies are not rushing to drill more, and most frackers plan to stay on the sidelines12. The biggest reason oil production isn't increasing is that U.S. energy companies and Wall Street investors are not sure that prices will remain high45. For years, the boom-to-bust oil industry spent lavishly to fund all-out production growth, but sustaining profits proved elusive, leading investors to demand more restraint from energy CEOs5. Today, oil companies are under enormous pressure from Wall Street to return cash to shareholders through dividends and buybacks, instead of investing in badly needed supply5.

Key facts from the story:

• Oil prices are rising, with some analysts predicting that they could soon hit $100 a barrel13.
• U.S. shale companies are not rushing to drill more, and most frackers plan to stay on the sidelines12.
• The biggest reason oil production isn't increasing is that U.S. energy companies and Wall Street investors are not sure that prices will remain high45.
• For years, the boom-to-bust oil industry spent lavishly to fund all-out production growth, but sustaining profits proved elusive, leading investors to demand more restraint from energy CEOs5.
• Today, oil companies are under enormous pressure from Wall Street to return cash to shareholders through dividends and buybacks, instead of investing in badly needed supply5.