U.S. liquids supply growth may struggle to grow more than 500,000 b/d a year as Lower 48 well productivity, particularly in the Permian Basin, declines, according to research by Raymond James & Associates Inc.

The analyst team led by Marshall Adkins on Monday said its current base case production forecast for the United States assumes 10% well productivity gains in 2019 and 5%/year in perpetuity. The base case also assumed higher oil prices, rig and well counts in the coming years. The U.S. drilling activity is forecast based on what would likely occur at current five-year oil futures strip pricing.

“Specifically, we are assuming the U.S. rig count (and associated fracture count) stays at around 900 total active drilling rigs over the next five years,” analysts said....