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US oil producers are investing big

Pumpjack New Mexico
Pumpjack New Mexico

Recently released figures suggest money is flowing in the US oil industry.

Capital expenditure for 44 US onshore focused oil production companies increased by $4.9 billion (EUR 4.6 billion), or 72%, between the fourth quarter of 2015 and the fourth quarter of 2016, according to their public quarterly financial statements.

The increase in investment spending is notable - the biggest year on year increase for the 44 companies since 2012.

Higher oil prices are behind the increase in spending, leading to an increase in earnings for oil producers which is prompting some to up their investment budgets.

Signs are that the investment growth is continuing into the first quarter of 2017. The U.S. active oil-directed rig count reached 662 on 31 March, 2017, up from 525 at the end of 2016, while company announcements also seem to point to continued increases in investment.

According to the US Energy Information Administration, financial indicators from the 44 featured companies suggest they are continuing to increase capital expenditure in exploration and development, in turn supporting continued growth in the US. Financial results for the first quarter of 2017 are expected in May.

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