US shale crude output to drop in June: EIA

OREANDA-NEWS. May 17, 2016. Crude output in major US shale basins is expected to drop by 113,000 b/d to 4.85mn b/d from May to June, 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 fall by 10,000 b/d to 2.02mn b/d in June.

Output in the Permian has continued to hold steady above 2mn b/d this year 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 58,000 b/d to 1.21mn b/d in June. Bakken output in June should drop by 28,000 b/d to 1.02mn b/d. And Niobrara output is expected to fall by 15,000 b/d to 391,000 b/d.

Utica crude output should be flat at 79,000 b/d in June, and production in the Haynesville should drop by 1,000 b/d to 47,000 b/d.

Marcellus oil production should drop by 1,000 b/d to 40,000 b/d. The Marcellus is the top US natural gas producing field, with gas output this month expected to top 17.3 Bcf/d (490mn 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 agency said.

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

Total US crude production should fall from an average of 9.1mn b/d in the first quarter of 2016 to an average of 8.1mn b/d in the third quarter of 2017, the EIA said in its most recent Short Term Energy Outlook released on 10 May.

Production is expected to fall most rapidly from April through September this year, at an average rate each month of about 160,000 b/d.