U.S. Oil Drillers Keep Pressure on OPEC With Record Shale Output

  • Date: 15/08/17
  • Bloomberg

Oil output from major U.S. shale plays is poised to reach a fresh record next month, further complicating OPEC’s efforts to support prices.

The gain is being led by the oil-rich Permian basin of Texas and New Mexico, where production has risen steadily over the past two years. The Energy Information Administration projects Permian output to rise by 64,000 barrels in September, reaching a record of 2.6 million barrels a day.

The forecast comes just as Saudi Arabia and Iraq, the two biggest producers of the Organization of Petroleum Exporting Countries promised to strengthen their commitment to cutting production. Crude output in the U.S. meanwhile has climbed in nine of the last 10 months. Prices declined to a three-week low Monday as the growing U.S. output and signs of lower demand from China stoked concern that a global oversupply will linger.

Shale drillers such as Pioneer Natural Resources Co. and Devon Energy Corp. have been taking advantage of price rallies near $50 a barrel to hedge their output for next year and beyond, with some producers locking in prices as far out as 2023, according to data compiled by Bloomberg.

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