US shale oil production to jump by 80,000 barrels a day in March, EIA says
The pace of the recovery in U.S. shale oil output is set to pick up steam next month as more crude-producing regions return to growth, according to the U.S. Energy Information Administration's latest drilling productivity report.
The EIA forecasts U.S. shale oil production in seven major regions will rise by a total of 80,000 barrels a day to 4.87 million barrels a day in March. This is the third month in a row the agency has projected output to rise.
The increase is nearly double the 41,000-barrels-a-day climb the agency expected for February in its last report. The EIA on Monday slightly raised its forecast for February output to 4.79 million barrels a day.
The Permian Basin in Texas and New Mexico continues to lead the recovery. The EIA sees drillers there increasing output by 70,000 barrels a day in March. The basin's geology allows drillers to produce a barrel of oil at relatively low cost.
The Eagle Ford in southern Texas is seen returning to growth next month with an addition of 14,000 barrels a day. The Niobrara in the Mountain region is also expected to raise output by 15,000 barrels a day.
The anticipated gains in those regions were partially offset by a projected decline of 18,000 barrels a day in North Dakota's Bakken shale.
American shale producers rely on an expensive method of drilling called hydraulic fracturing. They inject a mixture of water, minerals and chemicals into wells at high pressure to break up shale rock and release oil and natural gas.
A more than two-year downturn in oil prices 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.