Shale oil production, which has revolutionized the energy industry and transformed the US economy, will stop growing in August, according to a government report.
After hitting record highs in June and July, US crude output will fall in August for the first time this year to 9.4 million barrels per day, led by a decline in the Permian Basin rich in oil Combined with production cuts by the OPEC+ alliance, the U.S. slump is expected to push global oil supplies into deficit by the end of the year.
U.S. onshore output has slowed as oil companies curb capital spending in favor of boosting shareholder returns, a shift in strategy after chasing output growth at all costs over the last decade At the same time, the most prolific basins have been largely leased by oil companies willing to slow down and wait for the most opportune moment to increase. Oil prices have fallen 28 percent from a year ago amid demand and voluntary cuts.
The slowdown is also evidenced by a drop in the number of wells that have been drilled but not completed, showing that producers are clearing a backlog. Still, four major forecasters expect the Permian, the largest U.S. oil basin covering swathes of West Texas and New Mexico, to increase production by 40 percent from current levels to a peak in 2030, according to a Bloomberg survey.
