U.S. shale producers are expected to restore roughly half a million barrels per day of crude output by the end of June, according to crude buyers and analysts, amounting to a quarter of what they shut since the coronavirus pandemic cut fuel demand and hammered oil prices.
U.S. producers cut supply by roughly 2 million bpd. But the recovery in benchmark oil prices to around US$40 a barrel makes some shale output profitable again, even though that level is unlikely to spur additional new drilling activity. Larger producers are re-opening the taps in low-cost plays in Texas, but also in expensive shale basins in North Dakota and Oklahoma.
Producers are also pumping oil out of storage, which filled when demand plummeted as billions of people worldwide stopped traveling due to lockdowns to slow the spread of coronavirus. "We were able to shut in thousands of wells with really minimal time and effort. And we can bring those back on with really minimal time and effort, too," EOG Resources Inc Chief Operating Officer Lloyd Helms said at a Tuesday industry conference.
As of Friday in North Dakota, where the Bakken is primarily located, about 60,000 bpd of production had come back online from mid-May, leaving 450,000 still shut, according to the North Dakota Department of Mineral Resources.
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