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US shale oil production set to exceed 8.5 million bpd

Seven major shale formations will be responsible for 8.52 million barrels per day (bpd) of oil production in July, according to the new monthly drilling productivity report from the US Energy Information Administration (EIA).

The largest predicted jump concerns the Permian Basin, a prolific formation in Texas and New Mexico. Operators like ExxonMobil, the energy giant behind Mobil stockists, are set to increase production by 55,000 bpd to reach a new record of 4.23 million bpd.

The Bakken shale basin of Montana and New Mexico is also set to reach a new record, however, with a jump of 11,000 bpd pushing production to a fresh peak of 1.44 million bpd. The Niobrara basin, meanwhile, is predicted to reach a new record of 730,000 bpd following a rise of 10,000 bpd.

The rig count, however, has gone down over the last half year. This is often a good indicator of future output, and the decline suggests that operators are prioritizing earnings growth over increased production.

The EIA also revised down its predicted growth for total US output by some 140,000 bpd. This means that it now expects it to average 12.32 million bpd over this year. Even with the downward revision, this would be more than enough to break the previous record of 10.96 million bpd, which was set last year.

The production of US natural gas is also expected to reach a new high of 81.4 billion cubic feet per day in July.

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