The shale oil boom that turned the U.S. into the world’s largest fuel exporter and brought $3 gasoline back to America’s pumps is grinding to a halt.

Crude output from the prolific tight-rock formations such as North Dakota’s Bakken and Texas’s Eagle Ford shale will shrink 1.3% to 5.58 million barrels a day (MMbbl/d) this month, based on U.S. Energy Information Administration (EIA) estimates. It’ll drop further in July to 5.49 million, the lowest level since January, the agency said Monday.

With the Organization of Petroleum Exporting Countries maintaining its own oil production, U.S. shale is coming under pressure to rebalance a global supply glut. EOG Resources Inc., the country’s biggest shale-oil producer, hedge fund manager Andrew J. Hall and banks including Standard Chartered Plc have forecast declines in U.S. output following last year’s plunge in crude prices. The nation was still pumping the most in four decades in March.

“Production has to come down because rigs drilling for oil are down 57% this year,” James Williams, president of energy consultancy WTRG Economics, said by phone Monday from London, Arkansas. “Countering that is the fact that the rigs we’re still using are more efficient and drilling in areas where you get higher production. So that has delayed the decline.”

West Texas Intermediate crude for July delivery added 72 cents to $58.86 a barrel in electronic trading on the New York Mercantile Exchange at 6:23 a.m. local time. Futures rebounded 32% since March 18 through Monday amid speculation U.S. oil drillers had laid down enough rigs to curb supply.

Fewer Rigs

Despite the U.S. oil rig count falling for 26 straight weeks, domestic crude production surged 126,000 bbl/d, or 1.3%, to 9.53 million in March, the most since 1972, EIA data show.

“We do not believe that the direction of U.S. oil output has changed,” Standard Chartered analysts including Nicholas Snowdon said in a research note June 1. “In our view, U.S. oil supply is still falling, and it is likely to carry on falling for the rest of this year.”

Shale oil output will decline by 105,000 bbl/d in July after dropping 86,000 barrels in June, according to the London-based bank.

EOG Resources CEO Bill Thomas said at a conference last month that U.S. production would drop through the end of the year.

The EIA’s forecasts for U.S. oil production cover the yield from major plays that together accounted for 95% of domestic output growth from 2011 to 2013.

Eagle Ford

Output from the Eagle Ford in Texas, the second-largest oil field in the U.S., will contract by 49,000 bbl/d in July to 1.59 million. Production in the Bakken shale region of North Dakota will slip by 29,000 to 1.24 million, the EIA said.

Yield from the Permian Basin in West Texas and New Mexico, the largest U.S. oil field, will rise by 3,000 bbl/d to 2.06 million.

The EIA’s oil-production forecasts are based on the number of rigs drilling in each play and estimates on how productive they are.

U.S. drillers are retreating from oil fields as OPEC, which accounts for more than a third of the world’s oil, continues to resist calls to curb its own supply. The 12-nation group decided last week to instead maintain a combined daily crude-production target of 30 MMbbl. Output from the group has exceeded that level for each of the past 12 months, according to data compiled by Bloomberg.

Pyrrhic Victory

The EIA expects production from the shale plays to fall in July by 93,000 bbl/d, the largest drop since the boom began. The steepening decline provides some validation to OPEC members who decided to preserve their market share and let falling prices force others to cut back, said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $3.4 billion.

It may be a Pyrrhic victory for some OPEC members, such as Venezuela, whose budgets have been hampered by oil prices that fell more than 50% from last summer. The declines in U.S. production might not be piling up fast enough to boost crude revenues for them, O’Grady said.

“You’re seeing production go down, but is it going down fast enough?” O’Grady said by phone Monday. “If you’re a country like Venezuela, is it happening fast enough for you to basically be saved? That’s really the rub.”