Crude oil production in the Permian shale play reached a record-high last month, averaging 4.92 million bpd, the Energy Information Administration reported in the latest edition of its Drilling Productivity Report.
But the top shale play in the United States is seen boosting output even higher, to 4.996 million bpd this month and 5.076 million bpd in February, the EIA also said. Bloomberg noted in a report on the news that this makes the Permian alone a bigger producer than any OPEC members except Saudi Arabia.
Production in other shale plays across the U.S. is not performing as well as the Permian, but that's hardly a surprise given the devastation the industry suffered in 2020. Yet it also rose, to a total shale output of 8.34 million bpd for December. The total shale output of the U.S. is seen rising to 8.44 million barrels daily this month and further to 8.54 million bpd in February.
This was lower than the record 9.27 million bpd the shale patch produced in November 2019, but it's worth noting that the December production increased across almost all shale plays, and none recorded production declines.
The increase in shale oil output was as much a result of consistently higher oil prices and tighter global supply that made production growth a less risky, more attractive option for shale producers, most of whom had prioritized returning cash to shareholders over production increases.
Yet if prices go too high, this would be bad for the industry, according to industry executives. Per a Bloomberg report, shale oil CEOs see $100 as too high a price for oil, which would stimulate everybody to drill. According to Cit's Ed Morse, however, even if prices reach $100, they won't stay there too long precisely because of that return to the "Drill, baby, drill" mode.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More