US output growth ‘to shrink’ in April

10 March 2015, Newswires – Oil production growth in US shale fields is expected to slow to its lowest pace in over four years next month as slumping oil prices and company spending cuts begin to hit output, US government data showed on Monday.

Oil output from seven major US shale plays is seen growing by just 298 barrels per day in April, the slimmest monthly increase since February 2011, according to the Energy Information Administration. Production declines in the two biggest fields will weigh on growth, Reuters reported.

Output from the Bakken in North Dakota will decline by 8000 bpd to 1.32 million bpd in April from March, the first decline there since December 2013, according a monthly drilling productivity report. Production in the Eagle Ford in South Texas will fall 10,000 bpd to 1.72 million bpd in April, the first decline there since October 2013.

Meanwhile, oil production from the Permian basin in West Texas and New Mexico will rise 21,000 bpd to 1.98 million bpd in April, EIA said.

It was unclear if the forecast marked the beginning of the kind of sustained downturn in US oil production that many anticipate in the second half of this year because of falling prices.

Analysts said the weak numbers could instead reflect weather-related factors, including well freeze-offs in Texas and seasonal slowdowns in North Dakota.

“We won’t know until July how meaningful, if at all, the supply cut is,” said Ed Morse, global commodities strategist at Citi in New York.

Next month’s expected drop follows strong increases in the same period last year. In April 2014, Bakken production rose by 28,000 bpd from March, according to the data. In the Eagle Ford, output rose by 77,000 bpd.

Natural gas production in the major shale plays was expected to grow 0.2 billion cubic feet per day to 46.2 Bcfd in April from March.

The Marcellus, centred under Pennsylvania and West Virginia, looked set to have the biggest gas production increase, to 16.8 Bcfd in April from 16.7 Bcfd in March, EIA data showed.

That compared with Marcellus production of 13.9 Bcfd in April 2014.

The data showed gas output holding near 7.5 Bcfd at the Eagle Ford, while production in the Haynesville was expected to increase 0.1 Bcfd to 7.1 Bcfd in April.


– Reuters

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