Many smart people thought U.S. oil production would fall off a cliff along with the crash in crude prices.
In reality, it hasn't even come close to killing American production. The U.S. pumped 9.35 million barrels of oil a day in October, according to the latest government statistics available. That's up from 9.13 million barrels in October 2014.
"Oil production from the U.S. is very resilient, particularly from shale production," said Bielenis Villaneuva Triana, a senior analyst at Rystad Energy.
Official stats aren't available yet for the end of 2015 but the Energy Information Administration estimates U.S. production slipped to 9.24 million in December. That's hardly an all-out collapse.
All of this matters because the 70% plunge in oil prices since mid-2014 has been fueled by an epic supply glut. The oversupply has largely been created by skyrocketing U.S. output, which surged from just 4.6 million barrels per day in October 2005 to a high of 9.69 million last year, according to the EIA.
Many don't think the oil market will "rebalance" until production from the U.S. and other high cost areas slows meaningfully. It's clear Saudi Arabia isn't coming to the oil market's rescue any time soon out of fear production cuts will cause the OPEC leader to lose more ground.
Why U.S. production has remained strong
The resilience of U.S. oil production has been fueled by a number of factors. First, the cost of drilling keeps getting cheaper thanks to technological innovations made by shale companies and price cuts by servicing firms that provide the drilling equipment.
Secondly, U.S. shale drillers have become vastly more efficient by only drilling their best wells.
There's also the "ostrich phenomenon." That's what Tom Kloza, global head of energy analysis at the Oil Price Information Service, calls U.S. oil producers who continue to aggressively pump oil -- in effect digging their head in the sand -- rather than admit that prices may remain cheap for a long time.
"Ultimately, they're going to cut enough, but we're not there yet. We're not even close to it now," said Kloza.
And then there's the financial pressure to continue pumping. For many companies that borrowed heavily and sunk lots of money into oil wells, it may make more sense to keep pumping, for now at least.
Kloza compared the situation to a struggling restaurant owner deep in debt who suffers a slowdown in business.
"It's tough to shut down. You'll keep hope alive for a long time -- if only to pay the rent," he said.
Goldman Sachs: Market at 'inflection' point
But that can't last forever. At a certain point, oil prices do get so cheap that companies have no choice but to close up shop. Dozens of North American oil drillers have filed for bankruptcy since early 2015 -- and many more are likely to follow suit.
Goldman Sachs believes the U.S. oil market appears to have reached an "inflection" phase.
"We are now at a price level that is creating real fundamental change," Goldman wrote in a recent research report.
The investment bank said prices between $20 and $40 a barrel create operational stress where there's simply nowhere to store all the excess oil being pumped. That would force oil companies to "shut in" wells.
Goldman also pointed to the financial stress caused by cheap oil. Ultimately, prices at these levels will force struggling independent producers to stop pumping oil because they'll simply run out of money.
"Maybe in the end we get more defaults and bankruptcies and that's what drives the next round of production cuts," said Kloza.
U.S. oil output unlikely to plunge
The EIA projects U.S. oil production will continue to shrink, dropping to 8.7 million barrels per day in 2016 and then 8.5 million in 2017.
But Kloza said don't expect America to cut much further than that. That's because U.S. shale production can quickly be turned back on once prices go higher.
"Shale activity is very, very sensitive to oil prices. Once oil prices recover, activity will rapidly go back up again," said Villaneuva Triana.