Permian Basin operators are successfully coaxing more crude to the surface, and the Energy Information Agency is forecasting the region will raise its output to 2.4 million barrels a day in May.

The Permian will produce 662 barrels per rig next month, unchanged from April, according to the agency’s Drilling Productivity Report. Production from new wells will increase 205,000 barrels per day, offsetting a 129,000-barrel-per-day decline from legacy wells by 76,000 barrels per day.

“The rise in Permian oil production is remarkable,” Faouzi Aloulou, industry economist with the EIA said in an email. “In addition to increases in drilling activity, production has benefited from improvements in drilling efficiency and drilling and completion technology.”

Jesse I. Esparza, petroleum engineer in the agency’s Office of Petroleum, Natural Gas & BioFuels, listed four specific moves producers have made that have increased production.

“First, tighter well spacing,” he said in an email. “Tighter well spacing has resulted in an increase in the number of wells being drilled per pad and thus reduced the cost and time of moving rigs and completion equipment.”

Second, he cited improved production design and operations efficiency.

“By working in conjunction with completions, reservoir and drilling teams, the production team has improved well designs and target zones to maximize production,” he said.

Third, there is the operators’ trend toward drilling and recompleting vertical wells to offset natural declines.

“Rather than spending capital on drilling new horizontal wells, companies are focusing on drilling and recompleting older vertical wells at a cost of around $1 million per well, compared to new horizontal wells at $5 million to $9 million,” Esparza said.

Finally, he said the drop in oil prices prompted oil and natural gas companies to focus on their best assets — “i.e. areas with higher production rates and, more importantly, high rates of return.”

Aloulou and Esparza, along with Naser Ameen, were the principal contributors to the EIA’s report on Permian production.

Aloulou pointed to the agency’s short- and long-term outlooks for domestic production, which anticipate continued growth for Permian production.

In January, the EIA predicted domestic production would rise from 8.9 million barrels per day in 2016 to 9.3 million barrels per day in 2018, led largely by tight oil-producing states, primarily Texas and North Dakota. The agency said Permian production rose 5 percent in 2016 over 2015 levels to average 2 million barrels a day, and that increase is expected to increase into 2018, when it should average 2.5 million barrels a day.

In its Annual Energy Outlook 2017 issued in February, the agency said Permian production will remain relatively high through 2040.

“The biggest challenge facing Permian producers, in addition to oil prices, is midstream infrastructure additions that will limit production. According to Drillinginfo’s forecast, it is expected that production will exceed current takeaway capacity by the end of this year. Presently, Permian takeaway and refining capacity stands at 2.6 million barrels a day,” Esparza said.

Aloulou, Esparza and Ameen noted that between January 2016 and March 2017, oil production in the Permian rose in all but three months, providing a growing share of domestic production, while production in other regions fell amid low oil prices.

As of April 21, the number of rigs in the Permian Basin reached 340, or 40 percent of the 857 total oil- and natural gas-directed rigs operating in the United States. The Permian rig count reached as high as 568 in late 2014 before falling to a low of 134 in spring 2016.

The land area over the Permian Basin covers more than 75,000 square miles in 43 counties of western Texas and southeastern New Mexico, the EIA analysts said. However, they pointed out that more than half of the rigs that have been added in the Permian are concentrated in just five counties: Reeves, Loving, Midland, and Martin  in Texas and Lea County in New Mexico. Oil production from these five counties averaged 882,000 barrels a day as of November and accounted for approximately 42 percent of total Permian Basin oil production, which was 2.1 million barrels a day that month. As more rigs continue to be moved to these counties, production from these areas is expected to continue to increase, which will drive the increases in total Permian production.

They also cite last November’s report from the U.S. Geological Survey that estimated technically recoverable oil and shale gas resources in the Midland subbasin — specifically the Wolfcamp — could exceed 20 billion barrels of oil, 16 trillion cubic feet of natural gas and 1.6 billion barrels of hydrocarbon gas liquids.

The International Energy Agency said that even those riches may not be enough to meet future demand.

The agency reported global oil discoveries fell to a record low of 2.4 billion barrels in 2016, compared to an average 9 billion barrels per year over the past 15 years. Conventional resource development fell to 4.7 billion barrels, down 30 percent from 2015 levels as the number of projects that received funding dropped to the lowest level since the 1940s. Exploration spending is expected to fall again this year.

Even as conventional projects were declining, U.S. shale investments and production rose as production costs have fallen 50 percent since 2014. Of the 85 million barrels per day of global oil output, conventional oil production is 69 million barrels, accompanied by 6.5 million barrels per day from U.S. shale plays and the remainder from other natural gas liquids and unconventional sources such as oil sands and heavy oil.

The IEA said that as global demand is forecast to grow 1.2 million barrels a day per year over the next five years, that decline in investment could lead to tight supplies.

The agency puts the average break-even price in the Permian at $40 to $45 per barrel, with production from U.S. shale plays expected to rise by 2.3 million barrels a day by 2022 at current oil prices. It could be a larger increase if prices are higher.

“The key question for the future of the oil market is for how long can a surge in U.S. shale supplies make up for the slow pace of growth elsewhere in the oil sector,”  Fatih Birol, IEA executive director, said in a statement.