Business · Energy & Commodities · 2 hrs ago
Major US shale producers resist expanding drilling despite higher oil prices
Major US shale producers are holding back on expanding drilling despite a sharp rise in oil prices.
The average price of US benchmark WTI crude has been $86.72 a barrel this year, more than $20 above its 2025 average.
Diamondback Energy says uncertainty is too high to commit to a major increase in drilling next year, and it has not yet issued a formal 2027 plan.
The company generated $2.1 billion in free cash flow in the third quarter and raised its 2026 dividend, while also using cash to reduce debt and buy back shares.
Smaller independent producers are starting to drill more, but overall US oil production has risen only slightly as Middle East supply disruption and shipping costs add to market uncertainty.
The biggest producers are prioritizing spending discipline over rapid growth, and Diamondback says it usually sets its next-year plan in February.
Major U.S. shale producers are keeping drilling spending restrained despite a sharp rise in oil prices.
The WTI crude price averaged $86.72 per barrel so far this year, up from $64.94 in 2025.
Diamondback Energy said it does not plan to materially increase drilling activity next year.
Executives cited uncertainty in global markets and a risk that prices could fall.
Smaller independent producers have begun increasing drilling, according to the article.
- Who
- Major U.S. shale producers, including Diamondback Energy.
- What
- They are holding back on materially increasing drilling despite higher oil prices.
- When
- This year; Diamondback said it does not plan to materially increase drilling next year.
- Where
- The United States, including the Permian region.
- Why
- Producers cite uncertainty in global markets and the possibility of a downturn in oil prices.
This story does not have two clearly opposing sides.
Diamondback chief executive Kaes Van't Hof told analysts the company was preparing for the possibility of lower oil prices.
WTI crude averaged $86.72 per barrel, compared with $64.94 in 2025.
Diamondback said it did not plan to materially increase drilling activity.
- WTI average so far this year
- $86.72 per barrel
- WTI average in 2025
- $64.94 per barrel
- Diamondback Q3 free cash flow
- $2.1 billion
- Diamondback 2026 dividend
- Raised
What people are saying
I wouldn't say I'm unnecessarily cautious personally, but I think it's always good to prepare the company for a swing to the downside.
It's not a good way to run an E&P just to be a perma bull.
We're not real focused, as you know, on necessarily the volume target. It's really around making sure that we're executing it efficiently, deploying the capital efficiently, and then very importantly, leveraging the technology work that we've been doing to maximize the value of that development project.