Red Hot Permian Set To Jolt U.S. Shale Output To New Record

https://oilprice.com/Energy/Crude-Oil/Red-Hot-Permian-Set-To-Jolt-US-Shale-Output-To-New-Record.html

Crude oil production from the seven key shale regions in the United States is expected to increase by 80,000 bpd from April to hit a record 8.46 million bpd in May, with the Permian accounting for half of the monthly growth, the EIA said in its latest Drilling Productivity Report.

Crude oil production from the seven major shale producing regions is set to increase from 8.38 million bpd this month to 8.46 million bpd next month. The fastest-growing region, the Permian, is expected to see its crude oil production jump by 42,000 bpd from April to hit a record high of 4.136     million bpd in May, according to the EIA estimates—a figure that would place the US hotspot as OPEC’s third-largest producer behind only Saudi Arabia (9.79 bpd) and Iraq (4.52 bpd).

In the report forecasting production in May, the EIA sees the Niobrara region adding 22,000 bpd to reach oil production of 764,000 bpd in May—this would be the second-largest growth after the one in the Permian. The Bakken, the Eagle Ford, and Appalachia regions are also expected to see higher production in May compared to April, while Anadarko region’s crude oil production is forecast to drop slightly next month.

After oil prices collapsed by some 40 percent in the fourth quarter of 2018, U.S. shale drillers put some brakes on drilling activities. U.S. oil production growth has slowed, with average daily U.S. crude oil production slipping in January from the previous month for the first time in nearly six months, according to the EIA’s report from end-March.

In terms of total U.S. crude oil production, the EIA estimated in its April Short-Term Energy Outlook last week that U.S. crude oil production averaged 12.1 million bpd in March, up by 300,000 bpd from the February average. EIA now expects U.S. crude oil production to average 12.4 million bpd this year and 13.1 million bpd next year, chiefly driven by the Permian production growth. 

By Tsvetana Paraskova for Oilprice.com