Oil production to rise 4% by 2018
U.S. crude oil production is expected to rise 4% to 9.3 million barrels per day in 2018, from 8.9 million barrels per day in 2016, according to U.S. Energy Information Administration. The rise will primarily be a result of increased production in major oil producing states, including New Mexico, North Dakota, Oklahoma and Texas. North Dakota and Texas are the largest producers “because of the large amounts of economically recoverable resources in the Eagle Ford, Permian and Bakken regions.”
Texas, the state that produces the most oil, includes the Permian and Eagle Ford regions. The previous region has produced zones of “more than 1,000 feet thick and with multiple stacked plays.” Because of its size, the region allows for testing and drilling, and “the multiple stacked plays allow producers to continue to drill both vertical wells and hydraulically fractured horizontal wells.”
Since mid-2015, overall U.S. oil production has been declining, but it’s continued to increase in the Permian region. In 2016, production in the region rose 5% to 2 million barrels a day, compared to 2015.
The trend is expected to continue, with production to increase to 2.3 million barrels a day in 2017 and 2.5 million barrels a day in 2018. The Eagle Ford region is smaller than the Permian region and has fewer drilling opportunities. Its producing zones are about 200 to 300 feet thick and offer high production rates initially, but the rate declines more quickly than average production rates. Because of this, “drilling fewer new wells has a more immediate effect on production.”
Production in the region fell to 1.3 million barrels per day in 2016, from 1.6 million barrels per day in 2015. The trend is expected to continue through the first half of 2017, but production is expected to start increasing in the third quarter of this year and through 2018, “as higher oil prices encourage more drilling activity.”