US shale oil output to dip for 7th consecutive month – EIA

US shale oil output to dip for 7th consecutive month – EIA

US shale

Total US shale output is expected to fall 118,000 bpd to 4.723 million bpd in July.  Anadarko photo.

June 13 (Reuters) – U.S. shale oil output is expected to fall in July for the seventh consecutive month, according to a U.S. government forecast on Monday, despite a recent rally in crude prices to an 11-month high over $51 a barrel.

Total output is expected to fall 118,000 barrels per day (bpd) to 4.723 million bpd in July, according to the U.S. Energy Information Administration’s (EIA) drilling productivity report.

Bakken production from North Dakota is forecast to fall 32,000 bpd, while production from the Eagle Ford formation is expected to drop 63,000 bpd.

Production from the Permian Basin in West Texas is expected to drop 7,000 bpd, according to the data, representing its third consecutive monthly decline.

The U.S. shale oil and gas industry, led by upstart drillers who upended the global energy order after starting the shale revolution in 2005, has been under siege, pushed to the brink – or beyond it – by enormous debt loads and the largest, longest price rout in a generation.

U.S. crude futures fell from over $107 a barrel mid-2014 to a near 13-year low around $26 in February. Since then, prices have almost doubled, breaking through $51 last week as U.S. inventories declined and on supply worries in Nigeria.

Total natural gas production is forecast to decline for a fifth consecutive month in July to 45.8 billion cubic feet per day (bcfd), the lowest level since July 2015, the EIA said.

That would be down almost 0.5 bcfd from June, making it the biggest monthly decline since March 2013, it noted.

The biggest regional decline was expected to be in Eagle Ford, down 0.2 bcfd from June to 6.1 bcfd in July, the lowest level of output in the basin since May 2014, the EIA said.

In the Marcellus formation, the biggest U.S. shale gas field, July output was expected to ease by about 0.1 bcfd from June to 17.5 bcfd. That would be the fourth monthly decline in a row.

In the Marcellus formation, located in Pennsylvania and West Virginia, initial production during the first full month for a new well was expected to increase to a record high 11.2 million cubic feet per day in June. That compares with 8.9 mmcfd in July 2015.

If correct, that would be the 15th straight monthly increase in initial production for a new well in the Marcellus. That growth rate, however, was on track to decline for a fifth consecutive month in July.

(Reporting by Scott DiSavino; Editing by Chris Reese and Marguerita Choy)

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