US Shale Output Rising

US oil output is expected to continue to rise in February with production from shale rising by 111,000 barrels per day to 6.55 million bpd, the US Energy Information Administration said on Tuesday.

The global oil market has been closely watching US output, which may continue to contribute to global oversupply even as OPEC members, Russia and other producers curb production. The agency previously said US output could reach 10 million barrels a day in February and surge to 11 million in 2019, Reuters reported.

The agency expects oil production from new wells to grow in each of seven major regions. The Permian Basin of Texas and New Mexico accounts for the bulk of the production increase year-on-year, the data showed. At the same time, production growth in the Bakken formation of North Dakota is seen slower than a year earlier.

Eagle Ford oil output is expected to rise by 15,000 bpd to 1.27 million bpd, while Bakken output is set to rise by 8,500bpd to 1.22 million bpd, the agency said in a monthly report.

Permian production is forecast to rise by 76,000 bpd to 2.87million bpd. The number of drilled uncompleted wells in the Permian is at a record 2,777, and the national number rose to a record 7,493 drilled uncompleted wells.

Meanwhile, US natural gas production was projected to increase to a record 64.1 billion cubic feet per day (1.8 billion cubic meters a day) in February. That would be the 11th monthly increase in a row. The EIA projected gas output would increase in all of the big shale basins in February, except the Anadarko region in Oklahoma and North Texas, which is expected to decline for the first time in 13 months.

EIA said producers drilled 1,247 wells and completed 1,091 in the biggest shale basins in December, leaving total drilled but uncompleted wells up 156 at a record high 7,493, according to data going back to December 2013.