US EIA Expects Shale Production to Increase
June 15, 2021
Crude oil and refined product prices closed mixed yesterday. Supporting crude oil prices yesterday was news of significant maintenance of oil production in Canada and in the North Sea off the Coast of Great Britain. Bearish for prices is an EIA reporting showing more US shale oil production and news of Great Britain extending lockdowns for another month due to rising Delta COVID19 cases. .
Rystad Energy is estimating that approximately 330,000 bpd of oil production is offline in the Canada oil sands and another 370,000 bpd is offline in the North Sea due to seasonal maintenance.
The US Energy Information Administration said US oil output from seven major shale formations is expected to increase by about 38,000 bpd in July to about 7.8 million bpd. The biggest increase is set to come from the Permian, where output is expected to rise by 56,000 bpd to about 4.66 million bpd. The Eagle Ford basin in South Texas and the Bakken basin in North Dakota and Montana are each expected to register decline of 4,000 bpd. Output in the Bakken is expected to fall to about 1.1 million bpd, the lowest since July 2020.
Refinitiv Oil Research said it was tracking exports of Northwest European gasoline to the United States at 407,000 tons last week, aboard elven medium-range tankers. Gasoline exports increased by 47% on the week, as favorable arbitrage conditions supported chartering activity.
According to a survey by the Federal Reserve Bank of New York, US consumers are expecting the economy to boom over the next year, with expectations for inflation, home prices, earnings and the labor market all increasing in May.
ECB President Christine Lagarde said the euro zone economy is at a turning point, but its recovery must be firm and sustainable before the European Central Bank can debate cutting emergency support.
The US Federal Reserve has a meeting starting today and the market will be watching to see if there is any hint of starting to scale back monetary stimulus.