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Morgan Stanley Hikes Its Summer Oil Price Forecast to $94

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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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EIA Forecasts Continued Decline In U.S. Shale Oil Output

  • The EIA expects shale oil production in the United States to decline for a third consecutive month in September, dropping to 9.39 million bpd.
  • The Permian Basin will make up for the majority of the decline with a 26,000 bpd reduction, closely followed by Eagle Ford which is set to see a drop of 17,000 bpd.
  • Despite the continued decline in U.S. shale oil output, the EIA still sees U.S. oil production hitting a record high this year and surpassing that high in 2024.
Shale

Shale oil production in the United States is set to decline for the third month in a row to 9.39 million barrels daily, the Energy Information Administration said in its latest Drilling Productivity Report.

That would be down from 9.433 million barrels daily for August and a record-high 9.476 million bpd for July.

Most of the decline would come from the Permian basin—the star of the shale patch. There, the EIA has projected a production decline of 26,000 bpd, followed by a 17,000-bpd output drop in the Eagle Ford basin.

Reuters noted in a report that the decline this month would be the biggest negative monthly change since December last year.

Even so, the EIA remains certain total U.S. oil production will hit a record this year and another one in 2024. The agency has the same forecast for natural gas production.

For this year, the EIA last month said it saw production hit 12.76 million bpd, which would be an increase of 850,000 bpd on the 2022 average. In 2024, the EIA sees output rising by another 330,000 bpd to 13.09 million bpd.

Yet the rig count has been falling for much of the year and despite a recent reversal of the decline trend, the total rig count remains 16% below the levels it was this time last year, per Baker Hughes data.

That said, some shale producers have recently reported higher well productivity thanks to greater drilling efficiency. This increased productivity, however, has not been enough to keep prices in check.

West Texas Intermediate is currently trading at over $92 per barrel, pushing retail fuel prices higher, too. Yet even if producers decide to respond to higher prices with more drilling, it would take time to see the increased drilling—if it materializes—translate into lower crude and fuel prices.

By Irina Slav for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on September 19 2023 said:
    Many experts and prominent veterans of the US shale revolution believe that the US Energy Information Administration’s (EIA’s) figures about both US crude and shale oil production are so extremely hyped that only the IEA, Rystad Energy, BP Statistical Review of World Energy and the Financial Times all of whom are in cahoots with the EIA believe them..

    My estimates of US crude oil production range from 10-11 barrels a day (mbd) at best made up of 7.0 mbd of shale and 3.5-4 mbd of conventional oil.

    Shale oil is a spent force. Despite rising WTI prices above $92 a barrel, it is still unable to lift production meaningfully giving one excuse or another for its failure.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
    oin Our Community

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