US Oil production has apparently passed its peak - Commerzbank

In its latest monthly report, the US Energy Information Administration (EIA) has revised its forecast for US Oil production downwards, Commerzbank's commodity analyst Carsten Fritsch notes.

Drilling activity in the US has fallen significantly since mid-March

"It still expects an increase of a good 200 thousand barrels per day for this year. However, this is only because production in the first half of the year was higher than previously expected. Accordingly, production peaked in April at 13.59 million barrels per day. Previously, the EIA had expected this to happen in December 2025 at 13.7 million barrels per day. The new forecast at the end of the year is around 250 thousand barrels per day lower than the previous one. The downward revisions to production also extend to next year."

"As a result, US Oil production is expected to average a good 40 thousand barrels per day below the 2025 level. This would be the first decline in production since 2021, when production fell as a result of the coronavirus-related slump in the previous year. The sharp interim fall in Oil prices is also likely to play a key role in the deterioration in production prospects this time. Drilling activity in the US has fallen significantly since mid-March and, according to data from Baker Hughes, is at its lowest level since autumn 2021 with 442 active Oil rigs."

"Even the easier access to drilling permits by the US government can do little to change this. US President Trump's mantra 'Drill, baby drill!' is therefore reaching its limits. After all, lower Oil prices mean that there is no incentive for producers to make use of these licences. Even in the largest shale Oil deposit, the Permian Basin, production is expected to fall slightly in the coming year. The beneficiary of this development is OPEC+, which could regain lost market share from US shale Oil producers. Saudi Arabia is likely to feel vindicated in its decision to increase production further in the coming months."