Fast-rising crude oil production in non-OPEC countries, led by the U.S., is likely to grow more than demand in 2018, the International Energy Agency (IEA) forecast Tuesday in its monthly outlook report.
The Paris-based agency said U.S. output increased by a “colossal” 846,000 barrels per day (BPD) in just three months to November, setting the country to soon overtake Saudi Arabia’s production.
By year-end, the U.S. is expected to surpass Russia and become the global leader oil producer, Kallanish Energy learns.
“All the indicators that suggest continued fast growth in the U.S. are in perfect alignment; rising prices leading, after a few months, to more drilling, more completions, more production and more hedging,” the IEA said.
The current situation is reminiscent of the first wave of U.S. shale growth, when producers took advantage of high oil prices and made big gains in terms of market share, and eventually in 2014 forced a historic change of policy by leading producers – OPEC.
“Today, having cut costs dramatically, U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth,” the IEA said.
“This is a sobering thought for other producers currently sitting on shut-in production capacity and facing a renewed challenge to their market share. Another sobering thought is that it is not just a matter of production: trade patterns are changing,” the report added.