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Shale Drillers Are Holding Firm on Output as Oilfield Costs Rise

Publicly traded US frackers who drove global supply expansion for a decade are now grappling with soaring costs for steel, diesel and chemicals.

A rig drills for crude oil in the Permian Basin in West Texas.

A rig drills for crude oil in the Permian Basin in West Texas.

Photographer: Jordan Vonderhaar/Bloomberg

US shale oil drillers continue to show little sign of responding to high global prices with more production, only now it's not just their focus on rewarding shareholders that's holding them back, but also a preoccupation with soaring costs.

The combined oil and gas production forecasts from a dozen companies that have reported second-quarter results in recent days is barely changed from three months earlier, down just 0.6%, despite US crude prices surging to $120 a barrel this year after Russia invaded Ukraine. At the same time, higher diesel, steel, chemical and labor costs have prompted the companies to raise capital budgets by 7%.