U.S. oil companies don't plan to drill more, despite high prices

Consumers battered by sky-high gasoline prices shouldn't expect relief from the oil industry anytime soon.

Many oil and gas executives say they have little interest in increasing oil production — even at crude's near-record prices, which make extraction very profitable for their companies.

The price of crude has been steadily rising since the start of last year. It hit $100 a barrel in March after Russia invaded Ukraine — the first time in 12 years it breached three digits.

At that price, oil companies would normally race to buy up land and drill new wells. But a sizable number of oil and gas executives are saying they won't increase production at any price, according to a survey released this week by the Federal Reserve Bank of Dallas.

Asked what level the price of West Texas Intermediate oil would need to hit to get publicly traded oil and gas companies back into growth mode, 29% of executives said that their expansion plans weren't dependent on price. Another 9% named a price level above $120 a gallon.

Forty percent of respondents don't think that a price of $120 a barrel, which is very profitable from what we know about the marginal cost of shale production, is enough to increase output, said Paul Ashworth, chief North America economist for Capital Economics.

As to why they weren't drilling more, oil executives blamed Wall Street. Nearly 60% cited investor pressure to maintain capital discipline as the primary reason oil companies weren't drilling more despite skyrocketing prices, according to the Dallas Fed survey.