The U.S. government forecasts a significant drop in crude oil production this summer from the country’s seven major shale formations. The U.S. Energy Information Administration predicts a decline of 56,000 barrels a day in August to nearly 7.49 million barrels a day.
In its monthly productivity forecast issued this week, the EIA called it the lowest output in two years. The EIA projected the biggest decline would be in the Eagle Ford in Texas where output will slide about 23,000 bpd to 1.1 million bpd, the lowest since August 2017. Last week’s rig count produced by Baker Hughes Co. showed only 9 working rigs remain in the Eagle Ford play of South Texas.
In the Permian basin of Texas and New Mexico, production is expected to fall for the fifth straight month, easing about 13,000 bpd to 4.15 million bpd, the lowest since March 2019, the data showed.
Output from the Bakken in North Dakota and Montana is the only region forecast to see increases. Production there plunged by more than many other parts of the country earlier this year as oil prices collapsed after the coronavirus pandemic eroded global fuel demand.
Now that prices are have recovered from record lows, some of that Bakken output is expected to return.
The U.S. oil and natural gas rig count, an early indicator of future output, fell by five to an all-time low of 258 in the week to July 10, according to data from Baker Hughes Co going back to 1940.
Source: Reuters