By Charles Kennedy of OilPrice.com
U.S. crude oil supply will rise more slowly than expected for the rest of 2025 and in 2026 and peak as early as this year, as WTI benchmark prices below $60 per barrel are testing the breakeven point of shale production, energy flows intelligence firm Kpler said on Monday.
Kpler cuts 2025 crude forecast
Kpler has lowered its US crude supply forecast by 120,000 to 170,000 barrels a day for the rest of 2025 and into 2026, as weaker prices threaten to slow shale production. Brent is now expected to average $60 to $65 a barrel from the fourth quarter… pic.twitter.com/9OGwLd75Sj
— Kpler (@Kpler) May 5, 2025
Oil prices have slipped by more than 15% since the beginning of April as the market fears recessions from the U.S. tariffs and oversupply from the aggressive production hikes from OPEC+. Prices dipped early on Monday after the OPEC+ group decided on Saturday to raise collective output by 411,000 barrels per day (bpd), nearly triple the volume originally scheduled.
The U.S. benchmark, WTI Crude, was trading at about $57 per barrel—a price point that is below the breakeven levels for many shale wells, especially those outside the prime acreage and hottest spots in the Permian.
With the low oil prices, Kpler has now cut its U.S. crude supply forecast by 120,000 barrels per day (bpd) to 170,000 bpd for the rest of 2025 and into 2026, “as weaker prices threaten to slow shale production.”
“With WTI, the main US benchmark crude, now near breakeven levels for new wells, producers are likely to cut back drilling,” said the analysts at Kpler.
U.S. shale producers are the most reactive to oil price changes and they are typically quick to follow the price trends. Lower margins are prompting caution among the American oil industry, Kpler noted.
The latest OPEC+ move to fight for market share and discipline U.S. shale is putting pressure on U.S. crude output, said Kpler, which now expects America’s crude production to peak in 2025 and gradually decline after that.
Despite steady near-term activity, growth is slowing in the U.S. shale patch, and U.S. crude output is set to peak this year, Kpler noted.
Tyler Durden
Mon, 05/05/2025 – 12:25
