US Shale Output Breaks 13.2 mb/d Record, Partly Offsetting OPEC Cuts

The EIA's latest weekly report showed US crude daily output rose to 13.2 mb/d, a new record. This is mainly attributed to continued improvements in per-well production in the Permian Basin and increased offshore drilling activity. The continued growth of US shale oil output has partially offset the global supply tightening effect of OPEC+ production cuts and is an important reason why oil price gains have been capped despite OPEC+ support recently. From a cost structure perspective, the US shale oil breakeven price is approximately $55–$65/bbl; current oil prices still offer healthy profit margins, providing strong near-term incentives to continue increasing output.