The U.S. Energy Information Administration (EIA) has reported that oil production from the country’s top shale-producing regions is anticipated to fall for the third consecutive month in October, reaching its lowest level since May 2023.
According to EIA data, U.S. oil output is expected to decrease to 9.393 million barrels per day (bpd) in October, down from 9.433 million bpd in September. This decline of approximately 40,000 bpd represents the most significant monthly drop since December 2022. In July, the U.S. hit a record high of 9.476 million bpd.
The Permian Basin, located in Texas and New Mexico and the largest U.S. shale oil basin, is projected to experience a reduction of nearly 26,000 bpd, bringing production down to 5.773 million bpd. This would mark the lowest level since April.
Similarly, crude production in the South Texas Eagle Ford region is expected to decline by 17,000 bpd to 1.109 million bpd, reaching its lowest point since December 2022.
Conversely, oil production in the Bakken region of North Dakota and Montana is predicted to rise by approximately 3,000 bpd, reaching 1.227 million bpd—the highest level since November 2020.
Despite occasional increases in oil and natural gas rig counts, the U.S. rig count remains 16% lower compared to the same period last year. This is due to the priority of returning capital to investors and reducing debt among U.S. exploration and production companies, rather than solely focusing on boosting hydrocarbon production.
Nevertheless, the EIA foresees U.S. oil and gas production reaching record levels in 2023 and 2024, partly driven by rising oil prices. U.S. oil futures have been trading at their highest levels since November 2022, with a 14% increase so far this year, following a 7% gain in 2022. Meanwhile, U.S. gas futures have fallen by approximately 39% in 2023, following a 20% increase the previous year.
In terms of natural gas, total output in major shale basins is expected to decline by 0.3 billion cubic feet per day (bcfd) in October, reaching 98.4 bcfd, down from 98.7 bcfd in September. This would mark a record third consecutive monthly decrease, according to EIA data dating back to 2007. In the Appalachia region, which spans Pennsylvania, Ohio, and West Virginia and represents the largest shale gas basin, output is predicted to decrease to 35.7 bcfd in October, its lowest level since April.
The decline in shale oil and gas production may be attributed to various factors, including shifts in industry priorities and market dynamics. However, the EIA anticipates that overall U.S. production will remain robust, driven by favorable oil prices and market conditions.
