OPEC oil prices have plunged as production from shale formations has collapsed, raising fears about the viability of a shale revolution.
The Organization of the Petroleum Exporting Countries (OPEC) on Friday cut its crude oil production forecast for this year by 5 million barrels a day, citing a lack of new oil supplies.
Opec members have been seeking to cut output to boost prices, which have fallen from around $100 a barrel in 2016 to less than $60 in January.
“There’s an assumption that OPEC is going to cut its production,” said Patrick Moorhead, head of oil research at Moor Insights & Analytics.
“It hasn’t happened yet, and I’m not buying it.”
Moorhead said oil producers have been trying to find new sources of oil in the past five years, but the number of new ones has been declining, and it’s not clear whether that will continue in the coming years.
“The fact that they’re going to find less oil is very worrisome,” Moorhead said.
“This is the first time I think they’re really starting to see the effect of a global economic slowdown on the industry.
There’s an expectation of an oil price collapse that’s going to happen.”
U.S. crude oil inventories fell 6.4 million barrels in February, a decline of nearly 20 million barrels from January.
Imports have risen for a second month, rising 8.7 million barrels, or 5.9%, to an average of nearly 1.6 million barrels per day.
The U.S., Europe and Russia have all announced reductions in their production, leaving little spare capacity to replace the oil that has been produced.
U.N. Secretary-General Antonio Guterres said on Friday that a shortage of new shale oil reserves could mean that global oil supplies could drop below pre-peak levels by the end of the decade.
In the United States, production has dropped by more than 3 million barrels since mid-December, according to the Energy Information Administration.
In Canada, which had the highest production in the world in 2016, there were just under 6 million barrels of crude oil in storage in February.
That fell to 5.3 million barrels as of March 5.
In February, the Canadian government cut production by 1.7% in response to a shortage in shale oil, a decision that had the effect, according a report by Bloomberg, of “cutting supply in Canada by 2 million barrels over a four-month period.”
The government of the Canadian province of Alberta said it was considering whether to cancel oil production in 2018 or 2019.
“Our production in Canada has fallen dramatically in recent years and we have limited the number and types of wells we can drill,” a statement by the provincial government read.
“While the government will continue to pursue unconventional drilling in the Alberta Shale, it has made the decision to focus its resources on conventional production and to phase out unconventional drilling by 2035.”
The oil industry has also been dealing with a lack.
U.N.-backed oil analysts have forecast global oil production to drop by more 10 million barrels this year, to about 1.1 million barrels.
That would be more than double the current production of 1.4 billion barrels, according the International Energy Agency.
The biggest worry for the oil industry is that shale production will continue its decline, which would put pressure on supply and prices, forcing companies to seek new sources.
In 2016, shale producers lost more than 100,000 barrels a year, according by EIA.
The decline in production is already hurting the industry in the U.K., where shale oil production fell by 9.7 percent in 2016 compared with the same year in 2015.
The U.KS. government said on Thursday that shale oil was expected to fall by about 2 million more barrels this month, after an average decline of about 400,000 per day since April.
The drop in production from the shale formations also has hit production in other countries, including Brazil, the U, and Norway.
The shale oil boom has seen the price of crude fall by as much as 30% in the last two years.