After record high totals in June and July, U.S. crude oil production is forecast to fall in August for the first time this year. U.S. Energy Information Administration said in its drilling productivity report Monday it expects production of 9.397 million barrels per day in seven major shale regions in August – down 18,000 b/d from 9.415 million b/d in July.
That includes a decline of 11,000 b/d in Permian Basin in August to 5.764 million b/d from 5.775 million b/d in July. In August only Bakken (up 4,000 b/d to 1.222 million b/d) and Niobrara (up 3,000 b/d to 665,000 b/d) are expected to add production. Eagle Ford in south Texas is forecast to decline by 12,000 b/d to 1.124 million b/d.
Bloomberg said this week, “Combined with production cuts from the OPEC+ alliance, the U.S. decline is expected to tip the world’s oil supply into deficit by the end of the year… U.S. onshore production has slowed as oil companies limit capital spending in favor of boosting returns to shareholders – a shift in strategy after chasing production growth at all costs over the last decade… The most prolific basins have largely been leased up by oil companies willing to slow down and wait for the most opportune time to ramp up… The slowdown also is evident in a drop in number of wells that have been drilled but not completed, which shows producers are clearing up a backlog.”
EIA said the total of DUC wells (drilled but uncompleted) in seven regions declined by 24 to 4,804 in June from 4,828 in May. There were 857 DUC wells in Permian in June – down 20 from 877 in May.