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World Oil Supply

46

OPEC Monthly Oil Market Report – August 2017

Table 5 - 5: US shale play’s production growth forecast in 2017 and 2018

US oil rig count

The

US rig count

has shown its largest decline since before the drilling rebound commenced in late May-

early June 2016. The number of active rigs in the US dropped 4 units during the week ending 4 August to

total 954 rigs. However, this week’s downward movement was primarily supplied by gas-directed rigs, which

also lifted last week’s count. Gas-directed rigs fell by 3 units to reach 189 rigs, which is at a mostly stagnant

level since May but still up by 108 units since 26 August last year. US oil-directed rigs edged down a unit to

765 rigs, also their third drop in the past 6 weeks, during which time they have added just 7 units. The overall

count is still up 550 units since the bottom of the drilling dive for the weeks ending 20 and 27 May 2016. That

is still up by 449 units since 27 May 2016.

Graph 5 - 10: US weekly oil rig count

Graph 5 - 11: US weekly crude oil production

The rig count is an early indicator of future output. Despite the overall US declines for the week, Texas

recorded a 4-unit jump in its rig count and now totals 466 rigs, up 293 units since 20-27 May 2016. It is also

reported that Eagle Ford posted its first increase in 10 weeks, rising 2 units to 78 rigs, down 8 units since

2 June but up 47 units since last October. New Mexico and North Dakota each dropped a unit to 60 and

53 units, respectively. In the meantime, US crude oil output continues to rise according to preliminary

estimates from the EIA. Output during the week ending 28 July rose by 20 tb/d to 9.43 mb/d, up 970 tb/d

y-o-y. The “Lower 48” contributed 25 tb/d while Alaska dropped 5 tb/d.

Shale play

tb/d

Production

Y-o-y change

Production

Y-o-y change

Permian

1,872

410

2,322

450

Bakken shale

1,000

-20

1,024

24

Niobrara

318

23

353

35

Eagle Ford

1,213

40

1,293

80

Other plays

347

34

377

30

Total

4,750

487

5,369

619

Note: * 2017 and 2018 = Forecast.

Source: OPEC Secretariat.

2017*

2018*

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

Rigs

Week

2016

2017

Average 2012-2016

Historical range

2012-2016

Sources: Baker Hughes, US Energy Information Administration

and OPEC Secretariat.

5

6

7

8

9

10

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

mb/d

Week

2016

2017

Average 2012-2016

Sources: US Energy Information Administration and

OPEC Secretariat.

Historical range

2012-2016