The offshore market is on an upward trend, analysts say, although the recent dip in oil prices has put that in question.

U.S. oil prices have dropped by more than a third from an Oct. 3 high, the largest percentage decline since early 2016. As of Jan. 8, West Texas Intermediate was trading below $50 bbl., the minimum price most big shale companies plan their growth around. That’s down from an average of almost $67 bbl. this year through September, according to Wood Mackenzie Ltd. and RS Energy Group.

“Something has to give,” said Andy McConn, a Houston-based analyst at Wood Mackenzie. “We expected some minor increases in budgets going into next year but now we see risk to the downside, with budgets flat or down year on year.”

Rystad Energy, a Norwegian energy research company, agrees that the offshore recovery will slow, but it will stay on track because the industry has become more efficient and lower costs driven by bankruptcies and consolidations have reduced debt. The company estimates that more than 100 offshore projects will be undertaken in 2019, as opposed to just 43 in 2015. Of those projects, Rystad said, about 30% will occur in the Middle East, 25% in South America, 15% in Africa, 15% in Asia and less than 10% each in North America and Europe.

Despite the low amount of estimated offshore activity for North America in 2019, it should be the best year in the last four for the Gulf of Mexico, said Wood McKenzie. The U.K.-based energy research firm said that 2019 will feature the first increase in drilling in four years.

“We expect 2019 to be a strong year for the Gulf of Mexico. Following four years of decline, exploration activity is expected to increase next year by 30% in the Gulf of Mexico,” Wood McKenzie predicts. “Shell and Chevron will lead the way, but the actual growth in exploration will come from new entrants — Kosmos Energy, Equinor, Total, Murphy and Fieldwood,” said William Turner, senior research analyst at Wood Mackenzie.

The uptick in Gulf activity occurs as U.S. shale operators cut spending budgets next year for the first time since the last price crash in response to crude’s downward spiral, analysts said. While day rates won’t explode, modest gains should continue.