More US oil for traders in the commodity to worry about.
America’s major shale oil producing areas will lift production by 131,000 barrels a day in April to 6.954 million barrels a day, according to a report from the the US Energy Information Administration released Monday (https://www.eia.gov/petroleum/drilling/).
Oil output from the Permian Basin, which covers parts of western Texas and southeastern New Mexico, is expected to see the largest climb among the big shale plays, with an increase of 80,000 barrels a day. The Eagle Ford shale – also in Texas, will see production rise 23,000 barrels a day to 1.330 million.
US production was more than 10.36 million barrels a day the week before last, up 80,000 barrels a day and all of it from the seven major shale oil producing areas. If the 131,000 barrels a day increase happens, it will boost total output close to 10.5 million barrels a day.
The report was released shortly before oil futures trading settled for the day in New York. That saw April West Texas Intermediate oil down 61 cents, or 1.3%, to $61.36 a barrel in New York. It dropped to around $US61.30 in after hours trading. It had been down as much as 2.2% in early trading.
That was after a Wall Street Journal report appeared on line claiming OPEC was breaking down into two camps after more than a year of unity off the back of the 1.8 million barrels a day production cap
The paper said that on one side is Saudi Arabia, which wants oil prices at $US70 a barrel or higher, and on the other is Iran, which wants them around $US60.
The split is driven by differing views over whether oil at $US70 a barrel or more will see US shale companies lift production to the point where it sends prices crashing lower.
Iran wants OPEC to work to keep oil prices around $60 a barrel to contain shale producers, Oil Minister Bijan Zanganeh told The Wall Street Journal in a rare interview.
“If the price jumps [to] around $70…it will motivate more production in shale oil in the United States,” Zanganeh said. Shale producers are more nimble than big OPEC producers, using techniques that allow them to increase or decrease production depending on the oil price.”
