EIA: Crude Oil Production to Rise 80,000 Barrels a Day in December

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The U.S. Energy Information Administration (EIA) on Monday released its November report on drilling productivity in seven key oil and gas producing regions of the United States. Overall, oil production is projected to rise by 80,000 barrels a day in December to 6.174 million barrels per day. Total production in November is forecast to reach 6.094 million barrels a day, an increase of 55,000 barrels a day compared with October production.

In August the drilling productivity report added production from the Anadarko basin of Oklahoma and Texas and combined the Marcellus and Utica basis into a single Appalachia region.

In September the number of drilled but uncompleted (DUC) wells rose by 138 to a total of 7,204 including 914 wells in the Anadarko basin. For the month of October, the EIA expects the DUC count to rise to 7,342, an increase of 138.

West Texas Intermediate (WTI) crude oil for December delivery traded down about 2.4% at around $55.41 on Tuesday as traders react to this morning’s report from the International Energy Agency that the global crude market will remain oversupplied through the end of the first quarter of 2018.

No overall production declines are forecast either for November or December, but production from new wells is looking for a decline in production of seven barrels per day per rig. Production from new rigs is either expected to rise or remain flat from November to December.

Natural gas production is expected to rise by a total of 779 million cubic feet per day, with Appalachia production up by 394 million cubic feet per day. Production in the Permian Basin is expected to rise by 170 million cubic feet in December. Haynesville gas production is forecast to rise by 131 million cubic feet per day, and Niobrara production is expected to be up by 43 million cubic feet per day.

WTI crude oil for December delivery settled Monday at $56.76 a barrel, up two cents from Friday’s closing price of $56.74. Tuesday’s settlement price was down four cents to $47.55.

Natural gas for December delivery settled Monday at $3.17 per million BTUs, down four cents from Friday’s closing price of $3.21. Gas traded Tuesday down more than 3% at $3.07.