Oil Price
After U.S. oil output hit an all-time high in the final two months of 2023 with year-over-year growth clocking in at over 1 million barrels per day, the Energy Information Administration (EIA) said on Monday that American shale output from the top-producing regions would soar to a six-month high in June.
In its monthly Drilling Productivity Report released on Monday, the EIA said production in the top basins in the American shale patch would hit 9.85 million barrels per day–a volume not seen since December.
With shale output accounting for some 75% of total U.S. oil production, and well productivity improved by the day, output has a clear path for increasing.
According to the EIA, the production per new drilling rig in the Permian basin should hit 1,400 bpd in June, compared to 1,386 in May, which also represents the highest monthly output per single rig since late 2021. Overall, output in the Permian Basin is expected to rise to 6.19 million bpd for a total rise of nearly 18,000 bpd. By comparison, Eagle Ford output in Texas is poised to reach 1.11 million bpd–a record since last December, while output in the Bakken will increase just barely.
In December last year, U.S. crude oil production rose from 11 million bpd in July to 13.3 million bpd as producers took advantage of higher oil prices coming off a pandemic.
Standard Chartered analysts note that the U.S. shale patch has seen the horizontal rig count rise for three years in a row amid an output gap and supply below pre-pandemic levels. Standard Chartered sees some roadblocks, however, in the future, noting high decline rates and the necessity for extra well completions to offset those declines in order to maintain the current pace of production growth.
StanChart analysts note that the horizontal rig count started declining sharply early last year and is still 20% below its post-pandemic level.
By Charles Kennedy for Oilprice.com
