US shale oil output to drop 136,000 bpd to 7.44mn bpd in Jan: EIA

NEW YORK: US oil output from shale formations is expected to decline by about 136,000 barrels per day (bpd) in January to 7.44 million bpd, the lowest since June, the US Energy Information Administration (EIA) said in a monthly forecast on Monday.

Output at nearly all seven major formations is expected to fall, except from the Haynesville region, where output is forecast to remain largely flat.

The biggest decline is expected to come from the Permian basin of Texas and New Mexico, where production is forecast to drop by about 44,000 bpd to 4.2 million bpd, the lowest since June, the data showed. The second-biggest drop is expected to come from the Eagle Ford basin, where production is forecast to slide by about 25,600 bpd to 987,000 bpd.

Overall shale output is expected to decline for a fourth straight month, and by the most since May, when producers slashed production by about 1.6 million bpd to offset a plunge in global oil demand due to the COVID-19 pandemic.

However, shale output is set to slowly recover as hopes for a swift roll-out of a vaccine prop up oil prices as US drillers add rigs.

Natural gas production in January is also expected to fall to the lowest level since June, at 80.78 billion cubic feet per day (bcfd), a drop of 0.74 bcfd.

The biggest drop was forecast in the Permian region where production is expected to fall by 0.16 bcfd.

Production is expected to decline in all regions except Haynesville.

EIA said producers drilled 334 wells and completed 478 in the biggest shale basins in November. That left total drilled but uncompleted (DUC) wells down 144 at 7,330, the fourth consecutive monthly decline and the lowest since November 2018.