US crude oil production fell for a second month in November due to a drop offshore, but higher output from the biggest shale states highlighted the industry's surprising resilience. Production nation-wide in November dropped 52,000 barrels per day to 9.32 million bpd, the lowest figure since June, according to data from the US Energy Information Administration's petroleum supply monthly report on Friday.
Gulf of Mexico output fell 57,000 bpd, while onshore production inched up 3,000 bpd in Texas and rose 5,000 bpd in North Dakota, broadly in line with previously reported state data.
The data, though two months in arrears, is considered a critical indicator for traders and analysts trying to understand how quickly a years-long shale boom will begin to bust and help reverse a global glut that has sent prices to nearly 13 year-lows.
It has been far slower to materialise than expected even as recently as a few months ago. In November, US EIA forecasted that nation-wide production would fall by 82,000 bpd in the month versus October, according to its short-term energy outlook, which forecasts crude oil output by up to two years.
In absolute terms, Friday's data was much higher than expected, with output of 9.32 million bpd versus the 9.05 million bpd expectation in the EIA's forecasts.
Some analysts believed the data is not necessarily a reflection of the current supply landscape, saying the Gulf of Mexico output was lower in November but still higher year over year.
Others added that shale output is set to fall much faster in coming months.
"The drop that we saw (from the Gulf) in the latest data for November is likely to be a one-off," said Michael Tran, director of energy strategy at RBC Capital Markets in New York. "It's difficult to say with certainty, but it could've been technical or weather related. The bottom line is that the Gulf of Mexico is still growing and the rest of the US is not."