Sobering news for the U.S. oil industry

A new report from the Dallas Fed offers a sobering look at how much the oil price collapse and falling demand are going to batter the U.S. industry.

Driving the news: Their survey of oil companies showed that many need oil prices far higher than today's low prices to profitably drill new wells.

• A separate part of their quarterly report shows that for some companies in some regions, prices are now below what's needed to profitably operate existing wells.

Why it matters: Shale producers — both majors and independents — are planning to sharply pare back spending. Steep job losses loom in the drilling services industry.

What's next: The chart helps explain why U.S. production is slated to begin falling, though it'll take a while.

• "We expect the recent steep decline in prices to start showing in U.S. oil production data by July, as [well] completion activity is sticky over the very short term, primarily due to hedging," Barclays analysts said this week.
• The Energy Information Administration sees U.S. production starting to slide in Q3, and fall to an average of 12.66 million barrels per day next year compared to roughly 13 million this year.
• Their next forecast will show up in early April and could show even deeper projected declines.

Go deeper: Oil giants announce steep cutbacks