BAKU, Azerbaijan, Nov.22
By Leman Zeynalova – Trend:
The US Energy Information Administration (EIA) has increased its forecast of US crude oil production in 2019 by 30,000 barrels per day (b/d) (0.2 percent), as compared to the last month’s forecasts, Trend reports citing EIA’s November Short-Term Energy Outlook (STEO).
At the same time EIA increased its 2020 crude oil production forecast by 119,000 b/d (0.9 percent) compared with the October STEO.
The increases in crude oil production forecast in the November STEO were primarily driven by EIA’s upward revision to historical production in the Lower 48 states of about 90,000 b/d for August, based on EIA’s most recent monthly crude oil production survey data; A higher initial production forecast for future wells that will be drilled in the Texas Permian region through 2020; A slightly higher crude oil price forecast for the November 2019–January 2020 time period than in the October STEO.
EIA forecasts US crude oil production will increase to 12.3 million b/d in 2019 from 11.0 million b/d in 2018.
Although EIA forecasts that overall US crude oil production will continue to increase, EIA expects the growth rate will slow largely because of a decline in oil-directed rigs. According to Baker Hughes, active rig counts fell from 877 oil-directed rigs in the beginning of January 2019 to 674 rigs in mid-November, a 23 percent decline. Rig counts in the Permian region fell 15 percent during this period, from 487 to 408 rigs.
Although U.S. rig counts are declining, improvements in rig efficiency, which allows fewer rigs to drill the same number of wells, partially offsets declining rig counts. In addition, higher initial production from wells (although not necessarily the total estimated ultimate recovery) is offsetting some of the slowdown in rig counts.
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