Houston (Platts)--9 Nov 2015 543 pm EST/2243 GMT

Crude oil production from US shale plays is forecast to drop in December by 118,000 b/d to 4.94 million b/d, the biggest monthly fall since May, the US Energy Information Administration said Monday.

By contrast, the projected aggregate decline in production from the US' seven major shale plays has always been below 100,000 b/d in the previous eight months, EIA said in its latest monthly Drilling Productivity Report. The agency predicted last April that the US' multi-year surge in crude output that has contributed to a global excess of barrels on the market in the past year and a half would begin to reverse the following month.

The region likely to show the largest reduction in December is the Eagle Ford Shale in South Texas -- 78,000 b/d, for total production there of 1.278 million b/d, EIA said. That compares with a loss of 71,000 b/d forecast for November.

In addition, production in the Bakken Shale of North Dakota and Montana is forecast to fall by 27,000 b/d in December to 1.110 million b/d, compared to a projection of 23,000 b/d this month. And in the Niobara Shale of Colorado and Wyoming, oil production should fall by 22,000 b/d in December to 356,000 b/d. For November, a 20,000 b/d drop was predicted.

"The rig count is at its lowest," Jozef Lieskovsky, EIA senior energy analyst, said in an interview. "Also, we are coming up to Thanksgiving and then Christmas" holiday in November and December respectively.

"Looking forward, based on the rig count and with crude prices still down, this doesn't provide the incentive to complete any additional wells," Lieskovsky said. "I'd say with the cold and the Christmas holiday, things may taper off" as the year winds down.

On Friday, the Baker Hughes rig count showed that 572 oil rigs were working, the lowest since June 2010, and the total rig count stood at 771, the lowest since May 2002.

On Monday, NYMEX front-month crude oil settled down 42 cents to $43.87/b.

But EIA continues to project growth from the Permian, the US' largest shale play, albeit at a lower rate for the same reasons of falling rig counts and upcoming holiday slowdowns.

In that play, sited in West Texas and New Mexico, the agency targets production to grow in December by 11,000 b/d to 2.021 million b/d. For November, it had predicted 21,000 b/d of new oil production.

Besides the Bakken, Eagle Ford, Permian and Niobrara, the EIA also predicts production for the Utica Shale, located mostly in Ohio, the Haynesville Shale in Texas and Louisiana, and the Marcellus Shale, mostly found in Pennsylvania.

However, the latter three plays are mostly gas-prone and oil production is very low or negligible.

Lieskovsky noted that although there is some "uncertainty" going forward, EIA officials are taking into account what oil companies have said in the current round of quarterly conference calls about their production for the remaining fourth quarter and into 2016. He noted that many producers expect production to come down in the fourth quarter.

"So there's no reason for us to keep increasing productivity," he added.

In total, the seven US shale plays accounted for 95% of US crude oil production growth and all domestic gas output growth during 2011-2013.

Also in the DPR, EIA predicts productivity per rig, with the weighted average forecast this month at 473 b/d for the seven plays--up by 7 b/d from November estimates.

The Niobara and the Permian are said to be the fastest-rising in per-rig productivity. The former projected to increase to 652 b/d in December from 616 b/d last month, but the latter is likely to be nearly flat at 374 b/d next month with 372 b/d in November, the EIA said.

Lieskovsky noted the agency has been publishing DPRs since October 2013, and now has a little over two years of data. The agency is reviewing how well its forecasts have held and is looking to make improvements.

"One thing is becoming evident: in one month in winter, production drops but comes back up," he said. "We don't know the dynamics of what's going on, but we could adopt a lower forecast in winter based on those kinds of things."

"We're getting better at it," he added.

--Starr Spencer, starr.spencer@platts.com
--Edited by Richard Rubin, richard.rubin@platts.com

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