The decline of US shale oil production is to continue with a projected drop of 116,000b/d in February, adding to an overall decline of about 640,000b/d since the production peak in March 2015, Bloomberg reported citing a recently published analysis by the US Energy Information Administration.
Experts estimate that US production will fall by another 500,000b/d this year as output from existing wells declines and fewer new wells come online to replace it, with a potential production boost delayed until 2017. According to OilPrice, big offshore projects, scheduled to come online in Q3 and Q4 of 2016, may counterbalance the declining trend.
Shale oil production has dropped over crude prices collapse amid a global supply glut and analysts predict that seeing a fall in oil prices to $20 a barrel is possible. As a result, drilling companies have idled 64% of their oil rigs and will keep undermining the levels of shale production in months to come, wrote OilPrice. The key US oil producing regions of the Permian, Bakken, Eagle Ford and Niobrara are estimated to see the biggest projected decline. The four regions will be producing about 4.1 to 4.2mb/d by the end of 2016, which accounts for a drop by 1mb/d compared to last year. Some analyses estimate that around 50% of US shale oil producers could go bankrupt before the crude market reaches equilibrium, reported Hellenic Shipping News.