Shale Production Rises By 80,000 BPD In Latest EIA Forecasts

Shale production at American oil production sites will increase by 80,000 barrels per day next month, according to estimates from the Energy Information Administration.

So far, every month in 2017 has seen an increase in shale production as the industry profits off of production cuts by the Organization of Petroleum Exporting Countries (OPEC).

The Permian Basin, located mainly in Texas, is due to see the biggest increase in production. The site will see its production rise by 58,000 barrels per day, the EIA says.

OPEC just significantly overhauled its expectations for North American shale, projecting strong supply growth through the early 2020s. The revision came as part of OPEC’s World Oil Outlook (WOO), and it represents an acknowledgment from the cartel that it has failed to kill off U.S. shale by flooding the market.

OPEC’s de facto leader, Saudi Arabia, has been threatening the progress of American shale producers throughout 2017 because the jump in production threatens the progress of a 1.2 million-barrel production cut.

In the 2016 version of its WOO, OPEC predicted that North American shale would decline from 4.9 million barrels per day in 2015 to just 4.1 million bpd in 2017 – a contraction due to the supply glut – before rebounding a bit to 4.8 million bpd in 2021. Low prices, OPEC assumed, would successfully halt shale in its tracks, ending one of the most dramatic growth stories the world of oil has ever seen.

But a year later, OPEC is conceding that a different reality could be playing out. The 2017 WOO predicts North American shale output rises from 5.1 million bpd in 2017 to a massive 7.3 million bpd by 2021 and 8.7 million bpd in 2025. The 2021 figure is a whopping 56 percent higher than last year’s forecast.

By Zainab Calcuttawala for Oilprice.com

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