U.S. Shale Production To Drop to 7.6 Million Bpd In July

Oil production from the seven most prolific U.S. shale basins will fall to 7.632 million barrels per day, the Energy Information Administration said on Monday in its latest edition of the Drilling Productivity Report.

The news comes as the production per rig is expected to increase, from an average of 772 barrels per day per rig in June, to 798 barrels per day per rig in July. The basins covered in the EIA report include the Permian, Eagle Ford, Bakken, Niobrara, Anadarko, Appalachia, and Haynesville basins.

All of the seven basins are expected to see some drop off in July, with the Eagle Ford expected to see the sharpest drop in absolute terms at 28,000 fewer daily barrels, followed by Anadarko and Niobrara. In percentage terms, Anadarko basin will see the sharpest drop off, at 5.9%, followed by Niobrara with 3.9%.

The most prolific basin by far, the Permian, is expected to be the least effected basin in terms of percentage, set for a 7,000 barrel per day loss in July, or a 0.2% decrease in oil production. Production from the Permian basin is expected to fall to 4.263 million barrels in July.

Both the Appalachia and Haynesville basins are expected to drop an average of 1,000 per day next month.

Oil production has been on a steady decline over the last couple of months, with production falling from its high of 13.1 million barrels per day that it last hit mid-March, to just 11.1 million bpd that it hit the week ending June 5.

Oil's recovery is coming in fits and starts, with WTI prices up 2.23% on Monday at $37.07, after finishing down last week after OPEC decided not to extend the voluntary portion of the cuts into July.

By Julianne Geiger for Oilprice.com

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