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Oil Prices Rise After EIA Reports Small Crude Draw

Oil Prices Rise After EIA Reports Small Crude Draw

Oil prices stabilized today after…

EIA Predicts A Record Drop In U.S. Shale Oil Production

Crude oil production in the seven major US shale basins will fall by a record 197,000 barrels per day next month, the Energy Information Administration reported on Monday.

Production in the seven most prolific shale basins in the United States is expected to fall to 7.822 million bpd, the EIA said, down from 8.019 million bpd this month. It will be a record monthly loss.

The largest drop on the list for crude oil and condensate production is in the Permian, which is expected to fall by 87,000 bpd to 4.290 million bpd. The next largest basin, the Eagle Ford, is expected to fall by 36,000 bpd in June, to 1.174 million bpd.

There are losses expected in all seven basins on the EIA’s list.

Gas production is expected to see across-the-board losses, too, with the EIA predicting a loss of 779 million cubic feet per day. For gas production, the EIA is expecting that Anadarko will see the largest drop of 244 million cubic feet per day to 6,486 million. The next largest loss in June will come from the Permian, with a loss of 210 million cubic feet per day.  

The anticipated losses in production both this month and next are not surprising, although they are significant. Oil producers across the globe have cut production both as a market strategy and as a natural consequence of the low oil prices and shrinking storage capacity for crude oil.

Oil prices ticked up on Monday on positive developments on a possible coronavirus vaccine, as China’s demand for crude is looking up, and as the EIA predicted even greater production losses next month after the United States has already seen its crude production fall by more than 1 million barrels per day.

WTI was trading up 11.59% on the day at 4:30 pm EDT, at $32.84.

By Julianne Geiger for Oilprice.com

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