The US Energy Information Administration (EIA) on Monday said it expected a sharper decline in US shale oil production in June. In April, the EIA forecast production to drop 183,000 bpd to 8.526 million bpd in May. However, voluntary shut-ins by producers are estimated to accelerate the decline by 197,000 bpd to 7.822 million bpd in June. EIA also lowered its May production estimate by 500,000 bpd to 8.019 million bpd.
Well economics have deteriorated amid low oil prices, with producers announcing some output curtailments. In its latest Drilling Productivity Report, EIA said production from the Permian Basin would drop 87,000 bpd from May to 4.29 million bpd. Last month, it predicted Permian output to stand at 4.506 million bpd but revised it downward to 4.377 million bpd.
For the Bakken Shale, EIA estimated output to have been down by more than 225,000 bpd this month to 1.135 million bpd, compared to its previous estimate of 1.361 million bpd. For June, Bakken production is expected to drop by 21,000 bpd to 1.114 million bpd. In April, EIA projected Bakken output to fall by 28,000 bpd.
