US shale crude output to drop in August: EIA

OREANDA-NEWS. July 19, 2016. Crude output in major shale basins is expected to drop by 99,000 b/d to 4.55mn b/d from July to August, continuing a downward trend, according to new data from the US Energy Information Administration (EIA).

Production should fall in most formations including the Permian, Bakken, Eagle Ford, and Niobrara, the EIA said in its latest Drilling Productivity Report.

Crude output in the top-producing Permian should drop by just 6,000 b/d to 1.97mn b/d in August.

Output in the Permian has been more resilient than in other regions despite low commodity prices because of lower extraction costs. Several companies have decided to concentrate on the Permian while selling off assets in other fields.

Eagle Ford production is expected to fall by 48,000 b/d to 1.08mn b/d in August.

Output in the Bakken should drop by 32,000 b/d to 966,000 b/d. The Bakken region includes 15 counties in North Dakota and five counties in Montana.

Production in the Niobrara is expected to fall by 12,000 b/d to 371,000 b/d.

Utica crude output should stay flat at 77,000 b/d in August and production in the Haynesville should drop by 1,000 b/d to 46,000 b/d, the EIA said.

Marcellus oil production should be flat at 40,000 b/d. The Marcellus is the top US natural gas producing field, with gas output this month expected to top 17.9 Bcf/d (507mn m?/d).

The EIA's monthly report bases its estimates on the rig count combined with existing productivity data and estimated changes in existing production.

The seven fields in the report accounted for 92pc of US crude production growth from 2011-2014.

The EIA report is the latest sign of easing US production, following a sharp drop in rig counts.

US crude output should fall from an average of 9.4mn b/d in 2015 to 8.6mn b/d in 2016 and to 8.2 million b/d in 2017, the EIA said in its Short Term Energy Outlook released on 12 July.