Shale oil production in the United States is set to decline for the third month in a row to 9.39 million barrels daily, the Energy Information Administration said in its latest Drilling Productivity Report.
That would be down from 9.433 million barrels daily for August and a record-high 9.476 million bpd for July.
Most of the decline would come from the Permian basin-the star of the shale patch. There, the EIA has projected a production decline of 26,000 bpd, followed by a 17,000-bpd output drop in the Eagle Ford basin.
Reuters noted in a report that the decline this month would be the biggest negative monthly change since December last year.
Even so, the EIA remains certain total U.S. oil production will hit a record this year and another one in 2024. The agency has the same forecast for natural gas production.
For this year, the EIA last month said it saw production hit 12.76 million bpd, which would be an increase of 850,000 bpd on the 2022 average. In 2024, the EIA sees output rising by another 330,000 bpd to 13.09 million bpd.
Yet the rig count has been falling for much of the year and despite a recent reversal of the decline trend, the total rig count remains 16% below the levels it was this time last year, per Baker Hughes data.
That said, some shale producers have recently reported higher well productivity thanks to greater drilling efficiency. This increased productivity, however, has not been enough to keep prices in check.
West Texas Intermediate is currently trading at over $92 per barrel, pushing retail fuel prices higher, too. Yet even if producers decide to respond to higher prices with more drilling, it would take time to see the increased drilling-if it materializes-translate into lower crude and fuel prices.
By Irina Slav for Oilprice.com
Read More:EIA Forecasts Continued Decline In U.S. Shale Oil Output