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U.S. Oil Production to Cushion Price Hit to Economy, Eventually

  • Record fuel prices to depress other goods, services spending
  • Increasing capital expenditures in oil patch will take time
Contractors operate a drilling pipe at an oil rig in Reeves County, Texas.

Contractors operate a drilling pipe at an oil rig in Reeves County, Texas.

Photographer: Callaghan O'Hare/Bloomberg

Any increased capital spending by U.S. oil and gas producers in response to the surge in crude price should help soften the blow to the economy from an expected pullback in consumer spending. It just won’t be anytime soon.

Americans in the last week have witnessed an unprecedented weekly surge in gasoline prices, now up to $4.17 a gallon based on American Automobile Association data. Prices are likely to go up even more as President Joe Biden details plans to ban imports of Russian energy.