Even as prices recover, U.S. oil production is likely to only inch ahead – at best – in 2021 as producers focus on cash flow and returning capital to shareholders in bids to win back investors’ trust following the severe slump of 2020, economists at the Federal Reserve Bank of Dallas said Monday.

U.S. oil production

Kunal Patel, an economist at the Dallas Fed, as it is known, said public companies are “reluctant to spend more” on drilling while the pandemic remains a part of American life and a full demand recovery still remains uncertain. Speaking during a webinar hosted on Monday by the International Energy Forum (IEF), Patel noted that most companies during the current earnings season have repeated the same refrain: They are focused on bolstering cash flow in order to support dividends...