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.

On Sunday night Israeli Prime Minister Benjamin Netanyahu convened his security cabinet, after which officials told local media that the cabinet approved expanding anti-Hamas operations to “conquering Gaza, holding the territories.“

The plan, as cited in The Times of Israel, specifically calls for “conquering of Gaza” and retaining the captured territory, and follows on the heels of weekend reports that tens of thousands of extra reservists have been called up.

IDF Chief of Staff Lt. Gen. Eyal Zamir said of the plan it will see the IDF “take control of territory in Gaza, move the civilian population toward the south, attack Hamas, and prevent the terror group from taking control of humanitarian aid.”

It apparently has received some pushback from IDF commanders. Gen. Zamir himself has warned government ministers that this escalation plan could endanger the remaining hostages held in the Palestinian enclave.

“In a plan for a full-scale maneuver, we won’t necessarily reach the hostages,” Zamir was quoted as saying in a meeting with top officials. “Keep in mind that we could lose them.” Concerning the twin aims of reaching the hostages while defeating Hamas, the IDF chief called them “problematic in relation to each other.”

“This week, we are sending tens of thousands of draft orders to our reserve personnel to intensify and expand our action in Gaza. We are increasing the pressure to return our people [held hostage] and defeat Hamas,” he said.

But the plan is not expected to be enacted until after President Trump’s expected visit to the Middle East next week:

A senior Israeli defence official said on Monday there was a “window of opportunity” for a hostage deal in Gaza during US President Donald Trump’s visit to the region next week.

However, Reuters reports, if no deal is agreed Israel would begin its new operation in the enclave.

“If there is no hostage deal, Operation ‘Gideon Chariots’ will begin with great intensity and will not stop until all its goals are achieved,” he said, following a decision by the security cabinet to approve an expanded operation.

Defense Secretary Pete Hegseth will be in Israel May 12, while Trump will be in the Gulf. Along with visiting Saudi Arabia, “Trump will also visit Qatar and the UAE but is not currently expected to visit Israel,” writes Axios.

Among the total 251 Israeli and foreign hostages abducted on October 7, 2023 – there are 59 still remaining, and of these at least 35 have been confirmed dead. Netanyahu recently admitted that only up to 24 hostages are believed alive.

Outrage and controversy has been raging inside Israel, especially among hostage victims’ families, following remarks of Netanyahu wherein he strongly suggested that victory over Hamas is the top priority – and not the rescue of the captives. 

“We have many objectives, many goals in this war. We want to bring back all of our hostages,” Netanyahu had said at an even. “That is a very important goal. In war, there is a supreme objective. And that supreme objective is victory over our enemies. And that is what we will achieve,” he added. 

But just prior to Sunday’s cabinet meeting, he tried to soften the words, describing both the defeat of Hamas and rescue of the hostages as paramount.

59 hostages remain, and the IDF chief has warned those still alive will be at risk amid an expanded operation…

He posted to X that his administration is focused on two missions: “One, to bring our hostages back. Two, to defeat Hamas. Hamas will not be there, you have to understand this.” He emphasized, “In wars, you reach a decision — victory.”

The surge in calling up reservists continues, meanwhile, as they are increasingly needed as Israel’s military once again becomes more engaged in places like Syria, Lebanon, the Golan Heights, and security crackdowns in the West Bank. There’s also the increasing prospect of direct military action against the Houthis of Yemen, after the Sunday ballistic missile attack on Ben Gurion international airport.