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Oil Prices Jump As Saudis Cap Oil Supply

Oil Prices Jump As Saudis Cap Oil Supply

Oil prices rose on Tuesday…

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

Midland

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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  • citymoments on November 14 2017 said:
    With all due respect to the author of this article, I just like to highly recommend her to take some time to humbly ask anyone who is a qualified geologist or a oil field engineer about what is the difference between conventional oil and tight shale oil, primarily in two important aspects - the process of extracting conventional oil and shale oil, as well as the decline rate of production of each oil. Also, I just like to remind the chief editor of this website the quality of your publication really depends on the trade qualifications of your contributors. Oil and energy is a very specialised industry, it should be strictly technical and based on geology.
  • Bill Simpson on November 13 2017 said:
    How about that IEA writing that the coming shale boom in the US will be the greatest oil and gas boom in world history!
  • hal moore on November 13 2017 said:
    Too many DUCs domestically & after the mean calculations for incr. production
    models it becomes evident, the price ceiling influence of new production whenever it renders economically.
    The same international issues persist only now driven from greed to caloric survival.
    Best,
    Hal
    (Boomer Sooner)
  • Carlos Ankalata on November 13 2017 said:
    I guess we will just have to take them for their word right? I think they are tapping into the SPR as a piggy bank. I don't think anyone is buying that story anymore.

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