NEW YORK (Reuters) - U.S. shale production is set to snap a five-month decline in January, the U.S. government said on Monday, a move that comes just days after OPEC and rival producers agreed to reduce crude output in an effort to boost prices.
The month-on-month increase in production would be the first since July and the second rise in a year, according to the U.S. Energy Information Administration’s drilling productivity report.
January production will edge up 1,400 barrels per day to 4.542 million bpd, the EIA said. In December, it was expected to drop by 29,000 bpd.
In the Permian Basin of West Texas, output is projected to rise by 37,000 bpd to 2.13 million bpd, the data showed.
North Dakota’s Bakken oil production was set to drop by 13,000 bpd to 906,000 bpd. Eagle Ford output in South Texas was set to drop by 23,000 bpd to 980,000 bpd.
On Saturday, members of the Organization of the Petroleum Exporting Countries and rival producers agreed to cut global output in their first such deal since 2001. As part of the deal, non-OPEC producers would scale back output by 558,000 bpd.
The cutbacks, on top of the 1.2 million bpd by OPEC, would start in January.
Analysts point out, however, that production cuts globally would encourage further price increases, allowing U.S. shale drillers to ramp up output following a two-year oil rout.
Goldman Sachs said on Sunday that U.S. shale production is on track to grow in the first quarter, with producers achieving 800,000 bpd of annual production growth at $55 a barrel.
Total natural gas production was forecast to increase in January for the first time in five months to 47.5 billion cubic feet per day (bcfd), the EIA said. That would be up almost 0.1 bcfd from December.
The biggest regional decline was expected to be in the Eagle Ford, down almost 0.2 bcfd to 5.4 bcfd in January, the lowest level of output in the basin since November 2013, the EIA said.
Output in the Marcellus formation in the eastern U.S. was set to rise by almost 0.2 bcfd to 18.5 bcfd in January, a third consecutive increase.
EIA also said producers drilled 635 wells and completed 570 in the biggest shale basins in November, leaving total drilled but uncompleted wells (DUCs) up 65 at 5,218, the most since May.
Reporting by Catherine Ngai and Scott DiSavino; Editing by Chizu Nomiyama and Alan Crosby
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