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Oil Markets Stuck As Hedge Funds Remain Bearish

Oil Markets Stuck As Hedge Funds Remain Bearish

Crude prices haven’t staged much…

EIA: Seven Major US Shale Regions To Hit New Production Records

Bakken rig

Oil production in the seven most prolific US shale regions will hit new highs next month, according to the Energy Information Administration’s monthly Drilling Productivity Report released on Monday afternoon.

Production in the seven regions is expected to increase by 143,000 bpd in August over July’s 7.327 million bpd, according to the EIA.

The news came not even 24 hours after Wood Mackenzie called peak oil demand in 2036 as electric vehicle sales grow , sending oil prices sharply downward on the news.

At 4:15pm EDT, the WTI benchmark was trading down a staggering 4.10% (-$2.91) at $68.10. Brent crude was trading down even more, at 4.50% (-$3.39) at $71.94.

Of the seven more prolific US regions for oil, the Permian is expected to see the biggest increase, at 73,000 bpd, to reach 3.406 million bpd. If this level of production is realized in August, it would represent about a 400,000 bpd climb since January in the Permian alone.

Related: Oil Slides As Saudis Gear Up To Pump Record Volume

Increases in unconventional oil in the Eagle Ford is thought to come in a distant second, according to the industry body, at an 35,000-bpd increase to reach 1.436 million bpd.

The EIA’s Drilling Productivity Report also tracks drilled but uncompleted wells, which are seen increasing in number for August by 193 across the seven major regions—164 of which are in the Permian. This figure represents one of the largest monthly increases in recent months. The DUC count is of particular concern in the Permian, which is facing takeaway constraints. Some analysts are concerned, according to S&P Global Platts, that if oil and gas cannot be moved out of the Permian due to these constraints in the Permian, the number of wells in the Permian will need to be “banked” until such capacity is brought online.

By Julianne Geiger for Oilprice.com

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