The confinement effects including capillarity and adsorption play a significant role in phase behavior and transport of shale fluids. The effect of capillary pressure has been widely studied and is fully understood. However, the investigation of the adsorption effect on reservoir fluid properties and production performance is still lacking. In this work, an efficient model is proposed to fill this gap and investigate the phase behavior and well performance in the Bakken shale oil reservoir. First, an improved phase equilibrium model is developed based on an adsorption-dependent Peng-Robinson equation of state and a modified Young-Laplace equation. The effect of adsorption and adsorption induced critical property shifts in nature is considered. Second, the phase equilibrium model is used to calculate and compare the black-oil properties of the Bakken oil under different pressures and confinement conditions. Finally, the fluid properties results are combined with the reservoir simulator to assess the confinement effects on the well performance of the Bakken shale reservoir. The result indicates that fluid adsorption makes a more significant contribution to the suppressed bubble point pressure than capillarity. The change in the black-oil properties shows that the confinement effect exhibits a great impact on the physical properties of the oil phase including solution gas-oil ratio, oil formation volume factor, and oil viscosity, but presents a small impact on the physical properties of the gas phase including gas formation volume factor and gas viscosity. In terms of production performance, the presence of confinement increases the cumulative oil production, first increasing, and then decreasing cumulative gas production, which leads to a flatter producing gas-oil ratio. Overall, the effect of adsorption is more significant under high-pressure conditions, and the effect of capillary pressure is more significant under low-pressure conditions.