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U.S. oil production has peaked... at least for now.

That is the conclusion from a new government report that concludes that U.S. oil production is on the decline. After questions surrounding the resilience of U.S. shale and when low oil prices would finally cut into production, the EIA says the month of April was the turning point.

In its Short-Term Energy Outlook released on July 7, the EIA acknowledged that U.S. oil production peaked in April, hitting 9.7 million barrels per day (mb/d), the highest level since 1971. In May, production fell by 50,000 barrels per day, and EIA says that it will continue to decline through the early part of next year. Still, the declines won't be huge, according to the agency's forecast -- production will average 9.5 mb/d in 2015 and 9.3 mb/d in 2016.

The EIA figures move a little closer to what some critics have been saying for some time. Data from states like North Dakota and Texas had pointed to slowing production for months while EIA posted weekly gains in production figures for the nation as a whole. Along with several consecutive weeks of inventory drawdowns, EIA figures started to look a little suspect. The latest report is sort of an acknowledgement that those figures were a little optimistic.

Nevertheless, as the EIA conffirms peak production in the second quarter of 2015, the fall in output over the next few quarters should bring supply and demand back into balance, or at least close to it. Supply exceeded demand by more than 2.5 mb/d in the second quarter of this year, but that gap will narrow to 1.6 mb/d in the third quarter and just 500,000 barrels per day in 2016.

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On the natural gas side of things, production dipped a bit in recent months, owing to declines in the Marcellus Shale. Still the EIA is bullish on natural gas, predicting production gains of 4.3 billion cubic feet per day in 2015 (a 5.7 increase over the year before) and 1.6 Bcf/d jump in 2016. Last year, natural gas inventories were drawn down way below the five-year running average as cold weather caused consumers to burn through large volumes. Still, production kept climbing throughout 2014, building back depleted storage.

The refill in storage levels over the past year has been impressive. At 662 Bcf, natural gas storage levels are now 35 percent higher than they were at this point in 2014 and just a tad above the five-year average. The EIA predicts that storage levels will continue to climb, which could put further downward pressure on prices, having already fallen by nearly half from just November 2014. Towards the end of the year, natural gas storage levels could fill to above-average levels, which will reduce any chance of prices rising beyond where they are now (~$2.80/MMBtu).

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That could keep electricity prices from rising too much, certainly a welcome development for consumers. But it will also be awful news for coal producers, which are seeing their market shrink. Coal's share of the electricity market (a pie that is not really growing), is expected to fall by a massive 3 percent this year, plummeting from 38.7 percent to just 35.6 percent. In fact, in April natural gas captured more of the market (31.5 percent) than coal did (30.3 percent). Coal once generated half of the country's electricity, but natural gas and renewable energy are eating away at that dominant position.

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Lower coal generation (due to shuttered coal-fired power plants) means lower coal consumption. That in turn means coal mining companies are going to have a bad year. Across the country, U.S. coal production is expected to fall by 75 million tons this year. That will lead to further mine closures.

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Forecasting the future is impossible, and there is no doubt that the EIA projections will somehow get it wrong. For oil, in particular, estimates about prices are almost useless, as geopolitical events (Greece, China, Iran) overwhelm what appear to be simple supply and demand figures. Still, the projections at least offer a baseline against which we can compare different policies and geopolitical scenarios.

By Nick Cunningham, Oilprice.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.