16:21 GMT02 July 2020
Listen Live
    Get short URL
    0 81

    Figures released on Monday show a projected cut in US shale oil production for May, the first since data began to be collected.

    Oil prices rose on Tuesday after a report from the US Energy Information Administration [EIA], which projected a cut in shale oil production for the first time since it began to issue its Drilling Productivity Report in October 2013.

    According to the report, which focuses on the country's seven most prolific drilling areas, accounting for 95 percent of US crude oil production growth between 2011 and 2013, shale production in April totaled 5.618 million barrels a day. The estimate for May is 5.561 million barrels a day, a decrease of 57,000.

    At 9:07 AM in London Tuesday morning, Brent crude was trading at $59.68 a barrel, up 64 cents or 1.08 percent after Monday's close of $59.04. The trend continues last week's fourth straight weekly rise in the volatile oil market, in which the price of Brent was $58.95 a barrel at close on Friday, according to data from Marketwatch.

    The news is the first sign that low oil prices have made a dent in the US shale production boom, causing producers to cut capital budgets and shut down drilling rigs. After highs of around $110 a barrel in June last year, the price of oil fell to below $50 at the beginning of January, its lowest price since May 2009.

    Of the seven shale plays covered by the EIA report, just two were expected to see an increase in production, the Permian basin in Texas and New Mexico (by 11,000 barrels a day), and the Utica Shale Play in Ohio (by 2,000 barrels per day).

    The drilling report was released on the same day as the Organization of Petroleum Exporting Countries issued a stinging rebuke to non-OPEC producers, particularly those in North America, for their "go it alone attitude" regarding the supply of petroleum, according to which they "consider producing to the maximum as being the norm."

    "This same self-interest and unilateral thinking could not be more apparent today with the advent of the ‘game-changing’ tight oil, which has taken the market by storm over the past few years," wrote OPEC, citing the fact that while OPEC crude oil output has been stable over the last nine years at 30 million barrels per day, "non-OPEC production — led by the US and Canada — has surged by 6.3 million barrels per day. In 2014 alone, growth was measured at over 2 million barrels per day compared with 2013."


    US Concerned About Russia’s Possible S-300 Sale, Oil for Goods Program
    Middle East: Sectarian Divisions and Oil Riches
    Russia-Iran 'Oil for Goods' Program Well Underway – Russian Deputy FM
    oil drilling, oil production, US Energy Information Administration, United States
    Community standardsDiscussion