EIA Sees Lower Shale Oil Production In September - OilPrice.com
EIA Sees Lower Shale Oil Production In September | OilPrice.com
EIA Sees Lower Shale Oil Production In September
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For the second month in a row, the Energy Information Administration has forecast a decline in U.S. shale oil output, seeing the total falling to 9.415 million bpd in September, from 9.435 million bpd this month.
In July, the EIA also forecast that U.S. shale oil output will decline in August, seeing the average for this month at 9.397 million bpd, down from July’s 9.415 million bpd.
The production forecast is, in part, based on rig counts in different shale plays, which may not be as significant a fact as the EIA suggests. Industry executives said during this earnings season that their wells were producing more than expected, which has effectively reduced the relevance of the rig count for production numbers.
In an earlier report, the EIA predicted that total U.S. oil production this year will hit 12.8 million bpd, citing the same higher-than-expected well productivity that the industry reported. The EIA also noted higher oil prices as motivation for higher production, saying the 2023 and the expected 2024 average would be record numbers.
How that squares with expectations of lower shale output in the immediate term is unclear since shale is the biggest contributor to the country’s total. Also, companies may be seeing higher-than-expected production from existing wells but they are certainly not on a well-drilling spree like in previous years, which does suggest limited potential for substantial production growth over the short term.
Lower U.S. production would certainly affect global prices, and to a greater extent than before now that U.S. oil is part of the Brent benchmark and exports are running at record highs.
However, production that is growing stably but modestly would not have such a major impact on prices but will benefit producers by boosting their profits. Chances are, producers are well aware of that.
By Irina Slav for Oilprice.com
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Related Knowledge Center: ENERGY BASICS: petroleum
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