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OIL AND GAS
OPEC sees short-term balance in U.S. oil production
by Daniel J. Graeber
Vienna (UPI) Nov 12, 2015


disclaimer: image is for illustration purposes only

Shale oil production in the Lower 48 is on the decline, thought total U.S. oil production may be supported by growth in the Gulf of Mexico, OPEC said.

The Organization of Petroleum Exporting Countries aligned its expectations with data from the U.S. Energy Information Administration by saying U.S. shale oil production has declined. A drilling productivity report this week from EIA said only one of the seven shale basins accounting for new oil production gains will post an increase in December.

Third quarter reports from most energy companies show an increase in production despite lower crude oil prices, which face downward pressure because economic growth is not enough to sop up the excess oil on the market.

"U.S. crude oil production, particularly tight oil output, reflects an oil price outlook that will weigh on oil rig counts," OPEC said in its monthly market report for November.

Oil field services company Baker Hughes reported a U.S. rig count for October of 791, down nearly 7 percent from September and nearly 60 percent lower year-on-year.

For Texas, the No. 1 oil producer in the United States, OPEC said declines in the Eagle Ford shale basin contributed to an overall decline of about 27,000 barrels per day from July to August, the last full month for which data are available. Output was supported, however, by production in the state's Permian basin.

North Dakota, the No. 2 oil producer, saw production decline by about 20,000 bpd in August to 1.18 million bpd. While higher than August 2014, OPEC said the pace of increase in North Dakota was the slowest it's been since January 2010.

Inland declines may be compensated by what OPEC characterized as "strong growth" from the Gulf of Mexico, where year-on-year production increased 14.5 percent to 1.65 million bpd.

For full-year 2015, OPEC said it expected U.S. oil production to average 13.6 million bpd, unchanged from its October forecast.


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