Oil Is Well

Reuters reported today that the major US oil and gas producers spent more on payouts to shareholders last year than on exploration and development, according to an Ernst & Young report. By reducing capital spending, the industry is reducing its costs, contributing to upward pressure on oil and gas prices, and increasing its dividends and buybacks as profits swell.

Of course, plenty of other factors are influencing prices as well. This year, slower global economic activity led by weak growth in China has been weighing on prices. OPEC+, led by Saudi Arabia, responded to that development by reducing production this summer.