US Shale to Increase Production Next Year

America’s shale drillers are poised to ring in the new year with strong growth in the U.S. oil patch, according to the latest forecast from the Department of Energy.

Crude oil production from seven major shale regions is set to grow by 94,000 barrels a day in January, the department’s U.S. Energy Information Administration projected on Monday.

West Texas Intermediate graph

Total output from those regions is seen topping 6.4 million barrels a day next month. That would mark growth of more than 1 million barrels a day from this past January, when frackers produced 5.2 million barrels a day.

Most of those gains will come from the Permian basin, a prolific oil-producing region in Texas and New Mexico. Production there is set to rise by 68,000 barrels a day, according to EIA.

The EIA sees output growing by a more muted 9,000 barrels a day in North Dakota’s Bakken shale and by 6,000 barrels a day in the Niobrara basin, which sits beneath Colorado and nearby states.

Drillers in these regions free oil and natural gas from shale rock formations through hydraulic fracturing, a process of injecting water, sand and chemicals underground. The shale oil patch — where production can be quickly started up — is fueling a recovery in U.S. production following a slump caused by low crude prices.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza