West Texas Intermediate (WTI) crude oil prices have surpassed 2019 levels after having dropped significantly in 2020 when the market initially responded to the COVID-19 pandemic. As of September 17, 2021, however, U.S. crude oil production still remained approximately 2.5 million barrels per day (b/d) lower than its three-year peak in March 2020, and oil rig counts had returned to only 46% of their three-year peak in November 2018. As of September 17, 2021, the rolling four-week average U.S. crude oil production was 10.6 million b/d, the four-week average oil rigs was 404, and the four-week average WTI prices was $69.35 per barrel (b). Although higher oil prices are increasing oil revenue amid lower crude oil production, some U.S. oil producers are receiving more natural gas revenue as a result of both higher natural gas prices and increased takeaway capacity in the Permian region, particularly since late 2020. As a result, some second-quarter 2021 (2Q21) oil company financial statements reveal a significant increase in operating cash flows. Even though prices, revenues, and operating cash flows have returned to or surpassed 2019 levels for these companies, growth in their capital expenditures has been significantly lower; expenditures are around half the amount of 2019 levels, which could affect future rig counts and production.. …

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