U.S. shale oil output to drop to two-year low of 7.5 million bpd in August: EIA - Metro US

U.S. shale oil output to drop to two-year low of 7.5 million bpd in August: EIA

FILE PHOTO: An oil pump is seen operating in the Permian Basin near Midland

NEW YORK (Reuters) – U.S. crude oil output from seven major shale formations is expected to decline by about 56,000 barrels per day (bpd) in August to about 7.49 million bpd, the lowest in the two years, the U.S. Energy Information Administration said in a monthly productivity forecast on Monday.

The EIA projected the biggest decline would be in the Eagle Ford in Texas where output will slide about 23,000 bpd to 1.1 million bpd, the lowest since August 2017.

In the Permian basin of Texas and New Mexico, production is expected to fall for the fifth straight month, easing about 13,000 bpd to 4.15 million bpd, the lowest since March 2019, the data showed.

Output from the Bakken in North Dakota and Montana is the only region forecast to see increases. Production there plunged by more than many other parts of the country earlier this year as oil prices collapsed after the coronavirus pandemic eroded global fuel demand.

Now that prices are have recovered from record lows, some of that Bakken output is expected to return.

The U.S. oil and natural gas rig count, an early indicator of future output, fell by five to an all-time low of 258 in the week to July 10, according to data from Baker Hughes Co going back to 1940. [RIG/U]

Separately, the EIA projected U.S. natural gas output would decline for a fifth month in a row to 79.6 billion cubic feet per day (bcfd) in August.

That would be down almost 0.7 bcfd from the agency’s forecast for July. Output from the big shale fields hit a monthly all-time high of 86.4 bcfd in November.

Output in the Appalachia region, the biggest U.S. shale gas formation, was set to slip for a fourth month in a row in August to 32.7 bcfd, down about 0.2 bcfd from July.

(Reporting by Devika Krishna Kumar and Scott DiSavino in New York; Editing by Chizu Nomiyama and Marguerita Choy)

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