US shale oil production is expected to rise for a seventh consecutive month in July, according to a forecast Monday from the US Energy Information Administration, as analysts continue to raise concerns about oversupply given a resilient US shale industry.
July production is forecast to grow by 127,000 barrels per day to a record 5.48 million bpd, according to the EIA's monthly drilling productivity report. That would mark the biggest monthly rise since February and the highest production level since record-keeping began in 2007.
In the Permian Basin in West Texas and New Mexico, oil production is expected to rise by 65,000 bpd to 2.47 million bpd, according to the EIA's drilling productivity report.
In Texas' Eagle Ford, oil production is forecast to rise by 43,000 bpd to 1.37 million bpd, the most since February 2016. Meanwhile, in North Dakota's Bakken, oil output is set to rise by 5,800 bpd to 1.04 million bpd, the most since November, the forecast showed.
The higher forecasts could undermine an agreement by Opec in recent months to curb global supplies in a bid to raise prices. Analysts and traders have pointed out that the US shale industry could make up for any lost production from the cuts.
Meanwhile, US natural gas production was projected to increase to a record 51.7 billion cubic feet per day (bcfd) in July. That would be up almost 0.7 bcfd from June and also the seventh monthly increase in a row. The EIA projected gas output would increase in all of the big shale basins in June, with the biggest increase from gas associated with oil production in the Permian.
Output in the Marcellus formation in Pennsylvania and West Virginia, the biggest shale gas play, was set to edge up to a record high of 19.4 bcfd in July, a fourth consecutive increase. Production in the Marcellus was 18.2 bcfd in the same month a year ago. EIA also said producers drilled 992 wells and completed 816 in the biggest shale basins in May, leaving total drilled but uncompleted wells up 176 at a record high 5,946, according to data going back to December 2013.
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