U.S. Oil Production To Increase in November As Rig Count Falls

U.S. oil production is set to increase in November, according the Energy Information Administration’s (EIA) Drilling Productivity Report published on Monday.

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The EIA has forecast an increase of 81,000 barrels per day in November over October levels, even as the number of active oil rigs in the United States dipped steadily over the third quarter, shedding 20 rigs over the last eight weeks.

The EIA is also predicting that U.S. crude oil production will hit 9.9 million barrels per day in 2018, a new high for the United States, according to the agency’s Short-Term Energy Outlook.  The previous high was 9.6 million barrels per day, which was reached in 1970.

The largest increase to crude oil production is expected to come from the Permian Basin, where the EIA is predicting an increase of 51,000 barrels per day to hit 2.66 million bpd in November.

Anadarko and Niobrara are both expected to increase production in November by 9,000 barrels per day.

U.S. gas production, too, is expected to increase in November by 827 million cubic feet per day, with most of the increase coming from Appalachia.

EIA’s Drilling Productivity Report also shows a rise in drilled but uncompleted wells (DUCs)—from 7,091 in August to 7,270 in September. The Permian had the greatest number of DUCs at 2,416 in September.

The EIA notes that while both drilling and completion has been declining since the oil price crash in 2014, the US has seen a greater decrease on the completion side of the equation, meaning that the gap between drilled and completed wells is growing larger. The increase of wells drilled but not yet completed positions the United States to react more quickly to any upward price movement, although may be taxing in an extended lower priced environment as capital is expended to drill without profit.

By Julianne Geiger for Oilprice.com

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