The recovery of U.S shale oil is expected to quicken next month as more crude-producing regions return to growth, says the U.S Energy Information Administration’s latest drilling productivity report.
The EIA predicts U.S shale oil production in seven major regions will increase by a total of 80,000 barrels a day to 4.87 million barrels a day in March. This marks the third month the agency has projected output to rise.
The latest prediction is nearly double the 41,000-barrels-a-day climb the agency expected for February in its previous report. On Monday the EIA slightly raised its predictions for February’s output to 4.79 million barrels per day.
The Permian Basin in Texas and New Mexico is still leading the recovery. The EIA predicts drillers there will increase output by 70,000 barrels a day in March. Due to the geology of the basin, drillers are able to produce a barrel of oil at a relatively low cost.
The Eagle Ford in south Texas is expected to return to growth next month with an addition of 14,000 barrels a day. The Niobrara in the Mountain region is expected to grow as well, with a projected raise of output by 15,000 barrels a day.
On the contrary, those gains were partially offset by a projected decline of 18,000 barrels a day in North Dakota’s Bakken shale.
American shale producers use hydraulic fracturing, a rather expensive method of drilling. By injecting a mixture of water, minerals, and chemicals into wells at high pressure, they are able to break up shale rock and release oil and natural gas.
A downturn that has lasted over two years has made it difficult for many frackers to break even on production.
Oil prices have stabilized above $50 a barrel since OPEC and other crude-producing nations agreed last year to cut production by about 1.8 million barrels a day. The higher prices have made more U.S. shale drilling profitable.
Article written by HEI contributor Lydia Ezeakor.