U.S. producers blew through forecasts last year, adding the equivalent of another Venezuela to global supplies.

As reliably as warm weather returns to West Texas in late February, US shale executives are out on the road this earnings season pledging they’ll keep production growth modest during the next 12 months.

The past 12 months offer reason for skepticism.

A year ago, most independent oil chief executives said they would increase output 5% at most. And yet by the end of 2023, US oil production eclipsed nearly all forecasts. Shale effectively added a new Venezuela to global supplies at a time when OPEC+ struggled to cut deep enough to contain falling crude prices.

ConocoPhillips said drilling activity in 2024 will be flat, with output expanding at a “low single-digit” percentage.

Diamondback Energy Inc. was even more restrained, pledging its $26 billion merger with private giant Endeavor Energy Resources LP will result in growth of just 1.5% through next year.

US Crude Stockpiles Surged Last Week

Increase of 12 million barrels is weighing on oil prices

Source: Bloomberg, EIA

Overall, the US will see “a bit of deceleration,” adding about 400,000 barrels a day this year, ConocoPhillips CEO Ryan Lance said. That’s about half the amount of 2023.

Diamondback Chief Financial Officer Kaes Van’t Hof was blunt in his assessment.

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“Shareholders are not paying us for growth these days,” he said.

Expect similar proclamations in coming days as more companies report earnings.

The problem for oil traders as they try to gauge future US production is that what’s true for individual companies may not carry through to the shale system as a whole.

Even in the Permian, the biggest and most productive shale basin, publicly traded independents only account for about half of overall output, with the supermajors and private operators making up the balance.

Exxon Mobil Corp. and Chevron Corp. are on a different trajectory, with both projecting 10% growth this year off their already very large production bases.

Whether or not this is enough to offset the new restraint exemplified by the independents will be one of the key calls in oil markets this year, according to trader Pierre Andurand.

“After many years of strong growth we might say, ‘OK, that growth is behind us,’ and US supply will stop going up significantly,” he said in an interview. “Then the market will have a chance to rally.”

–Kevin Crowley and Julia Fanzeres, Bloomberg News