"New York Oil Prices Surge 3.4% on U.S. Shale Industry Output Cut Forecast"

# U.S. Crude Oil Prices Surge Over 3% on U.S. Shale Production Adjustment Expectations The New York oil market saw a significant rally, with prices jumping over 3% due to anticipated production cuts from the U.S. shale oil sector. These potential adjustments are in response to recent oil price drops caused by increased output from OPEC+—the coalition of the Organization of the Petroleum Exporting Countries and other key oil producers. On May 6 (local time), West Texas Intermediate (WTI) crude for June delivery, the benchmark on the New York Mercantile Exchange, spiked $1.96 (3.43%) to settle at $59.09 a barrel. Similarly, Brent crude for July delivery, the global benchmark, rose $1.92 (3.19%) to close at $62.15 a barrel. Both WTI and Brent crude had hit their lowest levels since February 2021 in the previous trading session. # Diamondback Energy Sparks Market Interest with Revised Output Projections Market sentiment shifted as Diamondback Energy, a leading independent oil producer in the Permian Basin—the epicenter of the U.S. shale boom—lowered its production forecast, reflecting the recent downturn in oil prices. In its earnings release, announced after markets closed the previous day, the company projected its median production outlook for the year at 488,000 barrels per day—around 0.8% lower than its forecast three months prior. Diamondback Energy also announced plans to reduce capital expenditures for the year. Travis Stice, CEO of Diamondback Energy, addressed shareholders in a letter, stating, “We believe that U.S. oil production has reached a tipping point at current commodity prices. It is highly likely that U.S. onshore oil production has peaked and will begin to decline starting this quarter.” Stice also commented on the broader implications of the shale boom, noting, “The shale revolution transformed our economy, granting the U.S. a level of energy security previously unimaginable in the early 21st century. However, current oil prices, volatility, and macroeconomic uncertainties now threaten these achievements.” # EIA Forecasts Decline in U.S. Crude Oil Production In related news, the U.S. Energy Information Administration (EIA) revised its short-term energy outlook, predicting that U.S. crude oil production will average 13.42 million barrels per day in 2023—about 100,000 barrels per day lower than its previous estimate. The EIA also noted that its models did not consider factors such as the Trump administration’s recent 90-day reciprocal tariff suspension or the OPEC+ production cut decisions. These changes highlight the increasingly fragile dynamics of the global oil market as U.S. shale producers recalibrate amid uncertain macroeconomic conditions and volatile energy prices.