- Analysts had hoped that oil production at the Permian Basin would hit record highs in October, with the EIA forecasting a 66,000-bpd increase.
- As the active rig count drops in the basin, however, analysts may soon have to revise those forecasts.
- Shale drillers are prioritizing returns to shareholders and paying down debts while at the same time dealing with supply chain problems and inflation.
Current forecasts of U.S. crude oil production growth may have to be significantly revised as the recent slide in active drilling rigs in the top shale basin, the Permian, suggests that output may disappoint due to supply chain constraints and cost inflation in the double digits.
The rig count in the Permian Basin dropped by 2 to 340 last week, as the number of total active drilling rigs in the United States dropped by 1, according to new data from Baker Hughes published on Friday.
The active oil rigs in the Permian now number 316 - the lowest in four months. This suggests that the most prolific U.S. shale basin, which continues to drive America’s oil production growth, is going through “a significant slowdown,” Bloomberg Opinion columnist Javier Blas argues.
The slowdown in activity, as evidenced by the drop in active oil rigs from 331 in July to 316 now, points to the fact that forecasts of Permian output, and by extension, U.S. crude oil production growth, need to be recalibrated lower.
As shale drillers prioritize returns to shareholders and paying down debts, they are not rushing to drill even at $90 or $100 oil. Even those planning an increase in drilling activity face supply chain delays and up to 20% higher costs.
At the same time, the Energy Information Administration said in its latest Drilling Productivity Report this week that crude oil production in the Permian is set to hit a record high next month, adding 66,000 bpd from September to reach 5.413 million bpd in October.
Yet not everyone is so optimistic: Pioneer Natural Resources CEO Scott Sheffield said last week that U.S. oil production growth would likely disappoint both this year and next.
Sheffield has forecast that U.S. oil production will add 500,000 bpd this year but in 2023 the production gains may be lower than this, due to constraints, Reuters reported last week. The EIA forecasts production growth of 800,000 bpd for 2023.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana Paraskova
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
More Info"oil" - Google News
September 14, 2022 at 03:00PM
https://ift.tt/i0Vt3j8
Analysts May Have Overhyped America's Largest Oil Basin - OilPrice.com
"oil" - Google News
https://ift.tt/IZFpYWS
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Analysts May Have Overhyped America's Largest Oil Basin - OilPrice.com"
Post a Comment