Oil production accelerating in the Permian Basin, EIA says

Oil production in the Permian Basin could rise by 53,000 barrels a day by next month, the Energy Department said Tuesday, and analysts expect the flurry of West Texas land deals to keep drillers pumping oil.

That’s the largest monthly increase in the region since January 2016, according to data compiled by the Energy Information Administration. The EIA’s first shale oil forecast of the year comes after U.S. shale drillers dispatched scores of rigs to the region and companies like Exxon Mobil Corp. and Noble Energy announced multibillion-dollar land grabs there.

“All these guys putting money to work are going to have to drill to get a return on their investment,” said Stephen Trauber, head of global energy investment banking at Citigroup in Houston. “They’re going to see pretty significant growth. There are still several more deals that could get done.”

The EIA said oil production across the nation’s seven major shale plays is set to rise by 41,000 barrels a day, with the Permian’s increase offset by declines in the Bakken Shale in North Dakota and the Eagle Ford Shale in South Texas.