Permian oil output forecast to hit record high in February -EIA

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Crude oil storage tanks are seen from above at the Cushing oil hub, appearing to run out of space to contain a historic supply glut that has hammered prices, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford

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NEW YORK, Jan 18 (Reuters) - The largest U.S. shale basin's output will surge to a record in February, according to a monthly forecast from the U.S. Energy Information Administration (EIA) on Tuesday.

The largest U.S. crude basin, the Permian basin of Texas and New Mexico, is expected to have an output increase of 80,000 barrels per day (bpd) to 5.076 million bpd, the EIA said.

Overall, crude output from U.S. major shale formations will rise by about 105,000 bpd to 8.54 million in February, the highest since March 2020, according to the EIA forecast.

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In March 2020, government officials imposed widespread lockdowns and travel restrictions to curb the spread of the coronavirus.

Production in the Eagle Ford region is expected to rise in February by 12,000 bpd to 1.116 million bpd, the EIA said. In the Bakken, production is seen increasing by 8,000 bpd to 1.192 million bpd.

Natural gas production from the major shale basins, meanwhile, will increase to a record high for an eighth month in a row in February, the EIA projected.

Total gas output was expected to increase by about 0.4 billion cubic feet per day (bcfd) to 90.2 bcfd in February.

Gas output in Appalachia, the biggest shale gas basin, was expected to rise less than 0.1 bcfd to 35.1 bcfd in February, the most since hitting a record 35.5 bcfd in January 2021.

Gas output in both the Permian in Texas and New Mexico and the Haynesville in Texas, Louisiana and Arkansas rose to record highs of 20.1 bcfd and 14.1 bcfd, respectively.

The EIA said producers drilled 686 wells - the most since April 2020 - and completed 900 - the most since March 2020 - in the biggest shale basins in December. That left total drilled but uncompleted (DUC) wells down 214 to 4,616, the lowest since March 2014.

That was the 18th consecutive month that the number of DUCs has declined, the longest streak on record, according to EIA data going back to 2014.

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Reporting by Stephanie Kelly and Scott DiSavino; Editing by Leslie Adler and Bill Berkrot

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Thomson Reuters

A New-York-based correspondent covering the U.S. crude market and member of the energy team since 2018 covering the oil and fuel markets as well as federal policy around renewable fuels.

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