Majors are looking to keep capex tight in 2017. They hope that by focusing extra cash on the US Permian they will be able to boost output nonetheless. With cost inflation already gathering pace they will struggle to pull this off.

The five supermajors plan collective capex spending of just $100bn in 2017, a further 3% cut from 2016’s multi-year low (see chart 1). This puts them on track to live out the IMF’s warning on an impending fourth straight year of capex cuts in 2017 (...