Us Oil Output From Top Shale Regions to Rise in March -EIA
Feb 19, 2024
Drilling rigs operate in the Permian Basin oil and natural gas production area in Lea County, New Mexico, U.S., February 10, 2019. REUTERS/Nick Oxford/File Photo

HOUSTON, Feb 12 (Reuters) - U.S. oil output from top shale-producing regions will rise in March to its highest in four months, the U.S. Energy Information Administration (EIA) said on Monday in its monthly Drilling Productivity Report.


The EIA said that production from the top basins will rise by nearly 20,000 barrels per day (bpd) to 9.7 million bpd, its highest since December.


Oil output in the Permian basin, the largest U.S. shale field spread across West Texas and New Mexico, was due to rise by about 14,000 bpd to 6.1 million bpd, the second-highest monthly output on record after November, the EIA said.


Production in the Eagle Ford in southeast Texas was due to rise nearly 4,700 bpd to 1.1 million bpd, the highest since September, the EIA said. In the Bakken, output was set to rise by about 3,000 bpd to 1.2 million bpd, the highest since December.


Total natural gas output in the big shale basins will ease to a two-month low of 100.4 billion cubic feet per day (bcfd) in March from 100.5 bcfd in February, the EIA projected.


That compares with a monthly record gas output high of 101.4 bcfd in the big shale basins in November 2023.


In the biggest shale gas basin, Appalachia in Pennsylvania, Ohio, and West Virginia, output is set to slide to a two-month low of 36.4 bcfd in March from 36.5 bcfd in February. Appalachia output hit a record 36.9 bcfd in December 2023.

The EIA expects new Appalachia gas well production per rig to rise to a 26-month high of 28.0 per million cubic feet per day (mmcfd) in March.


If correct, that would be a 14th straight monthly increase in new well production per rig. New well production per rig in Appalachia peaked at 34.4 mmcfd in December 2020.


The EIA said producers drilled just 850 oil and gas wells in January, the least since February 2022, and completed just 863, which was also the least since February 2022.


Total drilled-but-uncompleted (DUC) oil and gas wells slid by 13 to 4,386 in January, the lowest on record for a third month in a row, according to EIA data going back to December 2013.


Reporting by Arathy Somasekhar and Georgina McCartney in Houston and Scott DiSavino in New York; Editing by David Gregorio and Marguerita Choy


View on the Reuters website

Oil eases on higher US crude output, hopes of Israel-Hamas ceasefire

By Emalee Springfield • 02 May, 2024
HOUSTON, April 30 (Reuters) - Oil prices fell 1% on Tuesday, extending losses from Monday, on the back of rising U.S. crude production, as well as hopes of an Israel-Hamas ceasefire. Brent crude futures for June, which expired on Tuesday, settled down 54 cents, or 0.6%, at $87.86 a barrel. The more active July contract fell 87 cents to $86.33. U.S. West Texas Intermediate crude futures were down 70 cents, or 0.9%, at $81.93. The front-month contract for both benchmarks lost more than 1% on Monday. U.S. crude production rose to 13.15 million barrels per day (bpd) in February from 12.58 million bpd in January in its biggest monthly increase since October 2021, the Energy Information Administration said. Meanwhile, exports climbed to 4.66 million bpd from 4.05 million bpd in the same period. U.S. crude oil inventories rose by 4.91 million barrels in the week ended April 26, according to market sources citing American Petroleum Institute figures on Tuesday. Stocks were expected to have fallen by about 1.1 million barrels last week, an extended Reuters poll showed on Tuesday. Official data from the EIA is due on Wednesday morning. Gasoline inventories fell by 1.483 million barrels, and distillates fell by 2.187 million barrels. Expectations that a ceasefire agreement between Israel and Hamas could be in sight have grown in recent days following a renewed push led by Egypt to revive stalled negotiations between the two. However, Israeli Prime Minister Benjamin Netanyahu vowed on Tuesday to go ahead with a long-promised assault on the southern Gaza city of Rafah. "Traders believe some of the geopolitical risk is being taken out of the market," said Dennis Kissler, senior vice president of trading at BOK Financial. "We're not seeing any global supply being taken off the market." Continued attacks by Yemen's Houthis on maritime traffic south of the Suez Canal - an important trading route - have provided a floor for oil prices and could prompt higher risk premiums if the market expects crude supply disruptions. Investors also eyed a two-day monetary policy meeting by the Federal Reserve Open Market Committee (FOMC), which gathers on Tuesday. According to the CME's FedWatch Tool, it is a virtual certainty that the FOMC will leave rates unchanged at the conclusion of the meeting on Wednesday. "The upcoming Fed meeting also drives some near-term reservations," said Yeap Jun Rong, market strategist at IG, adding that a longer period of elevated interest rates could trigger a further rise in the dollar while also threatening the oil demand outlook. Some investors are cautiously pricing in a higher probability that the Fed could raise interest rates by a quarter of a percentage point this year and next as inflation and the labor market remain resilient. U.S. product supplies of crude oil and petroleum products, EIA's measure of consumption, rose 1.9% to 19.95 million bpd in Feb. However, concerns over demand have crept up as diesel prices weakened . Balancing the market, output from the Organization of the Petroleum Exporting Countries has fallen in April, a Reuters survey found, reflecting lower exports from Iran, Iraq, and Nigeria against a backdrop of ongoing voluntary supply cuts by some members agreed with the wider OPEC+ alliance. A Reuters poll found that oil prices could hold above $80 a barrel this year, with analysts revising forecasts higher on expectations that supply will lag demand in the face of Middle East conflict and output cuts by the OPEC+ producer group. View on the Reuters Website

Oil and gas industry’s “strong” free cash flow to support increasing production targets

By Emalee Springfield • 01 May, 2024
Last year, the demand for loans from oil and gas companies fell 6% year-on-year, and that followed a decline of 1% in 2022. Oil and gas companies don’t need a lot of loans because they’re generating so much money these days from their underlying businesses, said Andrew John Stevenson, senior analyst at Bloomberg Intelligence. And that trend is likely to continue through the end of the decade, he said. “The oil and gas industry has experienced a number of booms and busts over the past few decades, but for now, it appears to be flush with cash,” he said. The healthy balance sheets reflect the boost that companies have received from rising oil prices, buoyed by robust demand and OPEC+ production cuts. The sector’s free cash flow is so strong that the group’s leverage ratio, which measures a company’s net debt relative to earnings before interest, taxes, depreciation and amortization, fell to 0.8 in 2023 from 2.4 in 2020, Stevenson said. The ratio will likely slide below zero by the end of the decade, he said.
Share by: