MOSCOW (MRC) -- US oil output, from seven major shale formations, is expected to decline by about 68,000 barrels per day (bpd) in October to 7.64 MM bpd, reported Reuters with reference to the US Energy Information Administration (EIA) said in its monthly productivity report.
That would be the first decline in production since May, according to revised data from the agency.
Output at every formation is expected to fall in October, except the Permian basin of Texas and New Mexico, where production is expected to rise by about 23,000 bpd to 4.17 MM bpd, the data showed. That would be the smallest increase since production declined in May, the data showed.
The biggest decline is expected to come from the Eagle Ford basin in South Texas, where output is expected to fall by nearly 28,000 bpd to 1.13 MM bpd.
US oil prices are still down about 40% from the peak at the start of the year, due to coronavirus demand destruction.
However, US crude futures have gained almost 100% over the past five months to around USD37 a barrel, mostly on hopes global economies and energy demand will snap back as governments lift lockdowns.
Analysts said those higher oil prices have encouraged some energy firms to start adding rigs, an early indicator of future output, in recent weeks.
Separately, the EIA projected US natural gas output would decline for a second month in a row to 80.6 billion cubic feet per day (bcfd) in October.
That would be down over 0.4 bcfd from its forecast for September. Output from the big shale fields hit a monthly all-time high of 86.8 bcfd in November.
Output in Appalachia, the biggest US shale gas formation, was set to slip for a third month in a row in October to 32.8 bcfd, down about 0.2 bcfd from September.
As MRC wrote beofre, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels. Demand for oil will be the biggest casualty over lower energy demand in the coming three decades as weaker economic growth and a faster shift to renewable energy accelerates the demise of oil-based transport fuels, BP said its Energy Outlook 2020 published Sept. 14.
We remind that six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's overall PE production totalled 1,712,400 tonnes in the first seven months of 2020, up by 58% year on year. Linear low density polyethylene (LLDPE) accounted for the greatest increase in the output. At the same time, overall PP production in Russia increased in January-July 2020 by 24% year on year to 1,063,700 tonne. ZapSibNeftekhim accounted for the main increase in the output.
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