Houston — US shale oil production is set to increase only 11,000 b/d in February and 18,000 b/d in March, low growth levels not seen in over three years, the US Energy Information Administration said Tuesday, with only the Permian Basin increasing output in the months.
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Last month, EIA pegged February output growth at 22,000 b/d in its initial estimate before halving that figure in its revised forecast 30 days later in its Drilling Productivity Report.
The last time the agency's forward growth forecast for shale oil was lower was January 2017, when the growth rate was pegged at 2,000 b/d and total shale oil output was supposed to reach 4.542 million b/d.
The EIA sees total US oil production at 9.156 million b/d in February and 9.174 million b/d in March.
The Permian in West Texas/New Mexico is pegged to grow in February by 42,000 b/d on month to 4.816 million b/d and increase by 39,000 b/d in March to 4.855 million b/d.
For March 2020, oil output the Eagle Ford, sited in South Texas, should remain steady at 1.369 million, production in the Anadarko Basin in Oklahoma is forecast to drop by 10,000 b/d to 526,000 b/d, while production in the Niobrara Shale in Colorado should fall by 8,000 b/d.
Output in the Bakken Shale of North Dakota/Montana should recede by about 2,000 b/d next month to 1.472 million, while in natural gas-prone Appalachia, oil production is predicted to be down 1,000 b/d to 145,000 b/d.
EIA has forecast progressively lower growth levels in the second half of 2019, after its initial prediction of an 85,000 b/d increase for September 2019, as rig counts dropped, E&P companies exhausted their capital budgets and already-volatile oil prices inched down for a time.
Since then, the agency's monthly outlook for total US output growth has dwindled each month. For example, the agency initially predicted 74,000 b/d of growth in October, 58,000 b/d for November, 49,000 b/d in December and 30,000 b/d for January.
Last month, it pegged output growth at 22,000 b/d, but in the last 30 days revised that number lower for February to 11,000 b/d.
The last time the agency's forward growth forecast for shale oil was that low was for January 2017, when the growth rate was pegged at 2,000 b/d and total shale oil output was supposed to reach 4.542 million b/d.
AGENCY REVISES FEBRUARY OUTPUT PREDICTION
The EIA revised its February total US shale oil production forecast downward from last month's prediction. In January, EIA predicted shale oil would swell to a record 9.2 million b/d in February, but now it forecasts production for the month of 9.157 million b/d.
EIA analyst Jozef Lieskovsky said impact from the China coronavirus has not yet figured into DPR forecasts, although the agency is monitoring the situation.
As for slower growth prediction for March, data that emerged Friday from North Dakota's monthly production webcast, was "disappointing," Lieskovsky said, noting the Anadarko Basin has lost rigs and completed fewer wells, which figured into the agency's March estimates. But last week the Anadarko Basin added a few rigs, and "declines may stabilize in a few months," Lieskovsky added.
Also, going forward, some news out of the Eagle Ford Shale has been "positive" for potential oil growth, he said, and completions in the Bakken Shale could rebound during summer months and "bring [a bit of] new growth back" to the basin.
But, overall, Lieskovsky expects a flattish Bakken and Niobrara Shale output for the year.
"If you're going to see growth it will be in the Permian," he said.