It seems like everyday we are hitting a new record when it comes to gas prices.
You would think that oil companies would race to snap up land and drill new wells. But many companies report they are sticking to their previous plans for growth instead of quickly ramping output.
That’s despite the fact that the price of a barrel of crude oil has not fallen below $100 since the beginning of May.
So why aren’t they drilling more? In a survey done by the Federal Reserve Bank of Dallas, oil executives blamed Wall St.
Close to 60 percent cited pressure to maintain capital discipline.
According to economists, the energy market has been volatile in the past, so investors are looking for companies to pay down their debt and pay off shareholders instead of investing in new wells.
It’s not all bad news as OPEC plus has agreed to increase supply this summer.
The group of oil producing nations said it would raise by 50 percent an already planned production increase.
But the announcement has done little to move the needle. In fact, oil prices rose after the news was released. Which means this could be a pretty expensive summer for drivers.