US oil supply not to decline sharply after reaching its peak — Bloomberg

Bloomberg Opinion’s Javier Blas believes US shale oil output is likely to have peaked, yet further decline in production is not to be sharp. 

Blas highlights the impact of crude prices on output. In the past, low prices prompted shale companies to allocate more funds to drilling. However, the businesses are now under pressure from investors expecting payments, the expert says.

The governmental data shows total US oil output hit its latest high at 20.68 million barrels a day in October last year. The most recent weekly data put overall crude production at around 20.4 million barrels a day.

If the output holds at this level, the US would pump an average of 20.3 million barrels a day this year, up from 20.1 million barrels a day in 2024. A drop in the country's average production is most likely in 2026, but for that to happen, oil prices need to remain low for several months, Blas adds.

At the same time, the expert believes an increase in the Gulf of Mexico production will help offset the drop in shale output.