After years of rapid increases, U.S. crude oil production is expected to decline for the month of May for several of the key shale formations (including the Eagle Ford here in Texas).

Given recent oil price levels, the reversal isn’t all that surprising. So how important is the change in pattern, assuming, of course, that the EIA’s projection for May is correct? On balance, I don’t see it as a huge event.

The Energy Information Administration’s latest Drilling Productivity Report predicts that oil production in the seven most prolific shale formations will drop by 57,000 barrels per day in May compared to the April total. The largest of the group (the Permian, which includes both shale and conventional production) is expected to rise slightly (up 11,000 barrels per day). However, that increase will be more than offset by declines in the Eagle Ford (down 33,000 barrels per day), Bakken (down 23,000), and Niobrara (down 14,000). The other areas are either stable or changing only slightly. Other forecasters are also projecting that US oil production growth will stagnate very soon.

One factor at work is that the large gains in production levels in the recent past have largely come from new wells in shale plays, which often have steep decline curves. In the Eagle Ford, for example, the first full month of well production is a very sharp peak, with relatively rapid declines over the next year or so and then a slower drop. The EIA’s data for a well drilled in 2013 shows average production of about 325 barrels per day in the first month, about 175 barrels at six months, and 100 at one year. This phenomenon reflects the fact that when the dense rock is initially fractured, the oil flows freely, but production eventually decreases as the pressure begins to subside.

When wells are being drilled at a rapid pace, production thus quickly rises. However, when drilling slows, the steep decline curves common in shale formations enhance the negative effects on production. Drilling has certainly slowed over the past year, with Baker Hughes rig counts for Texas falling from 885 in April 2014 to 442 this month. With about half as many wells being drilled, it’s no surprise that production growth in the shales has stopped.

The cyclical nature of the oil business is well known, and this is not the “first rodeo” for many in the industry. Just a few years ago, the rig count dropped even more dramatically (from 887 in April 2008 to 393 in April 2009). Conditions and technology changed, and a surge soon followed. Subsequently, politics and prices changed, and the current slowdown began.

Even as drilling rigs are now filling up storage areas rather than lighting up the night sky, many oil companies are taking advantage of the time to identify new opportunities. Most are well capitalized thanks to the recent surge, and are mapping out new prospects and otherwise setting the stage for the inevitable turnaround. Once prices begin an upswing, you can bet that they will be ready to hit the ground running.

Unfortunately, the timing of a price recovery is hard to predict. The freshly released EIA Annual Energy Outlook 2015 notes that the “future path of crude oil prices can vary substantially” and includes significant price variation in the alternative cases. For example, Brent crude prices in the low-price case reach $76 per barrel in 2040, while in the high-price case they are $252. Quite a variation, indeed.

The problem with forecasting oil prices is that one of the key drivers is political, and the issues are complicated. OPEC’s multiple agendas include slowing down the shale boom in the U.S., keeping Russia in a situation that keeps natural gas flowing to the Ukraine and on to other parts of eastern and western Europe, and discouraging long-term offshore investments. There is even an argument that certain OPEC members want to slow the switch away from petroleum products toward efficiency or alternative fuels by letting prices fall and stay low for a while. On the other hand, most of the countries (including Saudi Arabia) are enduring prices well below those needed to sustain their current level of services.

I continue to think that prices will begin to trend upward later this year based on my attempts to surmise the likely behavior of OPEC (a difficult undertaking, to say the least). Of course, the declining shale production also has a somewhat corrective price effect. The bottom line is that prices are below the sustainable long-term equilibrium level, and such situations rarely persist for extended periods of time.