Rystad Energy had been projecting an increase in US shale production of 650,000 bpd by the end of this year, but recent developments have caused it to take a more pessimistic view of what's to come in the shale industry, the Houston Chronicle reported on Thursday.
U.S. Shale was pumping 10.4 million bpd in January 2020, and the 650,000 bpd of additional shale production that Rystad was anticipating we'd see by the end of 2020 would have seen U.S. shale produce more than 11 million bpd by the end of this year. But the coronavirus, which stripped away demand, and overzealous production by OPEC have both lowered the price of oil and filled oil storage to the brim.
The result? Rystad has lowered its projected change in output for the year by 2.15 million barrels per day. Additionally, it cautioned that this figure may "slide even further".
So instead of shale production increasing by 650,000 bpd, Rystad is now expecting production to decrease by 1.5 million bpd by the end of 2020.
Rystad's projections were released on Thursday and come in the same week as the Energy Information Administration's Drilling Productivity Report forecast that U.S. shale production in the seven most prolific basins for April is expected to fall by a record amount-193,625 bpd. The EIA expects this production to fall again in May by another 182,673 bpd.
According to the EIA's DPR, U.S. shale production has fallen by 546,622 bpd since December 2019.
The largest loss will come from the Permian Basin, the EIA's report showed.
West Texas Intermediate (WTI) was trading below $20 per barrel on Thursday afternoon, down 0.60% at $19.75.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More