Rising oil prices resulting from the OPEC deal have breathed new life into the US E&P sector, which is likely to complicate OPEC’s decision in May. If production growth exceeds expectations, it could threaten to undo the work of OPEC members last fall.

Producers continue to focus their spending on the Permian. Also, activity in the Eagle Ford has ramped up recently, but y/y growth is expected to remain negative because of steep declines last year. Production should fall 100 kb/d y/y in 2017 but increase 60 kb/d from Q4 16 to Q4 17, Barclays Research reported.

Further, in the Niobrara, production is expected to remain flat y/y in 2017 as producers focus their capital on other, more economic plays. The Scoop and Stack should be major beneficiaries of higher capex in 2017, yielding growth of roughly 70 kb/d y/y.

Many producers are planning to increase their US onshore capex by more than 50 percent y/y in 2017, which will lead to substantial m/m production growth as the year progresses, particularly in the Permian.

Spending is typically dependent on oil and gas prices, especially as companies attempt to spend closer to cash flow, but producers have been hedging actively over the past two-quarters, which should provide some stability to margins and ensure that companies are better able to achieve their announced 2017 capex plans.

"We update our forecasts and increase our expectation for US crude production by major producing basin. We now forecast US crude oil production to reach a multi-decade high by December, within sights of the all-time high reached in 1970", the report said.