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World Oil Supply

OPEC Monthly Oil Market Report – October 2017

49

Graph 5 - 9: US monthly liquids production breakdown

Oil production in the US Gulf of Mexico increased by 127 tb/d m-o-m, reaching a new record of 1.76 mb/d in

July, indicating growth of 201 tb/d, y-o-y. According to the US oil producer Hess Corp, higher investments in

offshore oil production are essential in order to avoid a supply squeeze by 2020, as expanding shale output

will not match the projected demand increases of the next few years.

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

US oil rig count

According to Baker Hughes’

report for the week to 29 September 2017, the US drilling rig count has risen by

5 unit to 940 rigs (79.8% oil and 20.1% gas), w-o-w, while the oil rig count is up by 6 units to 750 rigs. The

gas rig count decreased by 1 unit to reach 189 rigs.

On a monthly basis, the September rig count fell by 9, after dropping by 7 units in August. The US oil rig

count was higher by 325 rigs, y-o-y, an increase of 76.5%.Gas rigs grew by 93 units to reach 189 rigs y-o-y,

an increase of about 97%.

As a result,

at the end of September 2017, the US rig count for the last 16 months represents an

increase of 533 rigs (+131%) since the rig count bottomed out in May 2016, equating to the addition

of at least 1 rig per day.

The Permian is now home to nearly 52% of the active oil rigs in the US, its highest

contribution since basin-level data became available in early 2011.

0

2

4

6

8

10

12

14

16

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*

mb/d

Conventional crude oil

Gulf of Mexico crude

Conventional NGLs

Biofuels + Other liquids

Tight crude

Unconventional NGLs

Note: * 2017 and 2018 = Forecast.

Sources: Energy Information Administration, Rystad Energy and OPEC Secretariat.

Conventional

sources

Unconventional

sources

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

47

377

30

Total

4,750

500

5,369

619

Note: * 2017 and 2018 = Forecast.

Source: OPEC Secretariat.

2017*

2018*