NEW YORK (Bloomberg) -- A funding squeeze threatens to cut U.S. oil output by as much as half a million barrels a day by the end of the year, with shale producers among the worst affected, Citigroup Inc. said.

“Capital markets thus far have plugged shale’s funding gap but are showing signs of tightening, with impacts for drilling, oil supply and global prices,” Richard Morse and Ed Morse, analysts at Citigroup in New York, said in a note. Access to high-yield credit markets for debt-strapped producers is “sharply contracting,” they said.

High-cost oil producers in the U.S. have been forced to scale back in the past year after members of the Organization of Petroleum Exporting Countries decided to maintain output to defend their market position. U.S. crude prices have dropped almost 40% since OPEC announced its policy change in November to trade at about $45/bblWednesday.

“The U.S. could lose up to 500,000 bpd of output by year-end, half from shale,” Citigroup said in the note dated Tuesday. That loss almost matches Ecuador’s daily production, which was about 536,000 bpd last month. Ecuador is the 11th-biggest producer in OPEC, whose 12 members supply about 40% of the world’s oil.

Cuts to reserve-based lending, which allows companies to secure loans with undeveloped oil resources, will remove an important source of liquidity, according to the bank. Weaker producers may face bankruptcy, while those with “high-quality” assets should be more resilient, it said.

The number of oil rigs in the U.S. has shrunk by almost 60% since reaching a record-high last October, Baker Hughes Inc. data show. Production in the country fell for a fourth week on Aug. 28, the longest declining streak since January 2012, according to the Department of Energy.