U.S. oil production continues to grow, but the shale industry is in the midst of deceleration as low oil prices and a financial squeeze slow the pace of drilling.
The U.S. added 246,000 bpd of fresh supply in April, the latest month for which data solid is available. That put to rest concerns that the industry was in the midst of contraction after production fell in January and February (some of which was due to offshore maintenance). Even as the rig count continues to fall, production grinds higher.
The EIA expects output to grow by another 70,000 bpd in July, with the Permian alone adding 55,000 bpd.
But the rate of growth is slowing. In April, production was up 1.6 million barrels per day (mb/d) compared to the same month a year earlier. By any measure, that is a massive increase. But it is down sharply from the nearly 2.1 mb/d year-on-year increase seen in August 2018, which looks set to be the peak in terms of the pace of growth.
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U.S. oil production is not in danger of outright decline, not for the foreseeable future. But growth is clearly slowing. The U.S. could add 1.3 mb/d of new supply this year, according to an average of forecasts from multiple analysts, compiled by Reuters. That figure would be down from 1.5 mb/d of additional supply that came online in 2018.