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US EIA boosts November shale oil output forecast to over 9.08 million b/d

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Permian to lead growth with 4.73 million b/d next month

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Washington — Despite expectations of a drilling slowdown, the US Energy Information Administration on Monday increased its forecast for November US shale oil output to over 9.08 million b/d, up 113,000 b/d from last month's forecast.

In its Drilling Productivity Report, EIA said it expects US shale oil output to climb to more than 9.13 million b/d in December, up 49,000 b/d from November, and an increase of 967,000 b/d from December 2018.

US shale oil growth continues to take place mostly in the Permian Basin, where output is forecast to average nearly 4.73 million b/d in December, up 57,000 b/d from November. EIA increased its Permian production forecast for November from last month by 123,000 b/d to 4.67 million b/d.

Bakken oil output, the second-largest source of shale oil growth, is forecast to climb by 9,000 b/d to nearly 1.51 million b/d.

In an interview with the Platts Capitol Crude podcast Monday, Lynn Helms, North Dakota's top oil and gas regulator, said oil output in the Bakken will likely break records into early 2020, but growth will likely stall as operators struggle to meet stricter enforcement of state flaring rules.

"The public sentiment around flaring is changing, and the public perception of it on a state and national level is that it has to decrease," Helms said. "Its public pressure, really, that's driving more heavy enforcement of gas capture regulations and more focus on incentivizing that side instead of incentivizing oil production growth."

Output in the Niobrara is expected to climb 6,000 b/d from November to 771,000 b/d in December, while Eagle Ford oil output is forecast to fall by 14,000 b/d in November to below 1.37 million b/d in December, EIA said Monday.

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In its World Energy Outlook last week, the International Energy Agency forecast US shale oil output to grow from about 6 million b/d in 2018 to 11 million b/d in 2035.

"The majority of this growth comes from the Permian Basin, which by itself produces more crude oil than the continent of Africa soon after 2030," the IEA said.

But IEA cautioned several variables, including concerns about flaring in the Permian, the availability of financing, and technology development could cause production to increase or decrease by 2 million b/d either way over the next decade.

IEA raised its estimate of remaining US tight crude oil and condensate to 155 billion barrels, up from 115 billion barrels the agency estimated a year ago.

In its Short-Term Energy Outlook last week, EIA said it expects US crude oil output to average a record 13.03 million b/d in November and then to climb to 13.41 million b/d by November 2020.

Overall production growth is expected to slow compared to recent years. For example, EIA forecasts US oil output to increase by 380,000 b/d over the next year, compared to 1.03 million b/d of growth from November 2018 to November 2019 and 1.93 million b/d of growth from November 2017 to November 2018.

-- Brian Scheid, brian.scheid@spglobal.com

-- Edited by Jim Levesque, newsdesk@spglobal.com