America’s Oil Power Might Be Near Its Peak

livemint.com:

A U.S. shale boom that helped suppress oil-price surges over the past two years is waning. The country’s crude oil output is expected to increase by just 170,000 barrels a day in 2024 from last year, down from a jump of 1 million barrels a day in 2023, according to federal record-keepers.

That is the smallest annual increase since 2016, not counting the pandemic. Gushers of new U.S. crude have helped cap soaring oil prices despite OPEC production cuts and global turmoil, including most recently in the Middle East.

The gains were driven by private producers that commandeered rigs after Russia’s invasion of Ukraine sent prices soaring to more than $120 a barrel in early 2022. Now, that growth is expected to slow dramatically. Declining oil prices led producers to lay down rigs last year.

Then, many of the operators that had been drilling with abandon were acquired by bigger players looking for ways to expand in the U.S. Those big public companies have given priority to returning cash to shareholders over drilling new wells. “The ease in growth has gone, unless somebody comes up with a very dramatic new technical innovation," said Paul Horsnell, head of commodities research at Standard Chartered Bank.

Last week, Morgan Stanley analysts lowered their estimate for U.S. oil output this year and raised their forecast for Brent crude to a range of $80 to $85 a barrel, from $75 to $80. The move came a day after Diamondback Energy said it was buying privately held Endeavor Energy and indicated it would give priority to controlling costs.