Texas shale oil production is expected to explode over the coming few weeks, with output from the Permian Basin expected to hit a record 2.6 million barrels per day in September, News Radio 1200 WOAI reports.
The Energy Information Administration, in a report out today, expects Eagle Ford production to hit 1.39 million barrels a day, and the entire U.S. shale putting out a record 6.5 million barrels per day in September.
The EIA is predicting near record U.S. oil output of 10 million barrels per day in 2018.
The EIA says the recent increase in world oil prices to the $50 range allowed major drillers to reinvest in the shale fields. Many producers are hedging, with prices locked in for several years, to insure that they won't be at the mercy of market swings.
All this is bad news for OPEC, which was on the verge of an agreement for Iraq and Saudi Arabia, the two leading producers, to cut output in hopes of raising prices. The EIA says this U.S. production surge is expected to undercut those efforts.