Greg Goebel
The production of oil shale in the US "exceeded all expectations," increasing by 600,000 barrels a day in the last year, the IEA report said. This can be explained by higher oil prices and measures taken by oil companies to reduce costs and increase drilling activity and efficiency. "Oil production in the United States will exceed 10 million barrels a day, which will allow bypassing Saudi Arabia and competing with Russia," IEA experts say.
The US Energy Information Administration (EIA) confirmed the increase in US oil production this week. According to the organization, for the week to January 12, production in the country increased by 258,000 barrels per day, to 9.75 million barrels per day.
In November, OPEC and ten non-cartel countries, including Russia, agreed to extend the agreement to reduce oil production before the end of 2018. The deal was concluded in late 2016 to eliminate the surplus supply of oil on the world market and support prices for it. This agreement, as well as a strong decline in oil production in Venezuela and geopolitical risks contributed to the recovery of oil prices. In January, the price of Brent reached $ 70 per barrel for the first time since 2014.
OPEC production in December fell to 32.23 million barrels per day, according to the IEA, including due to the fall in Venezuela by 216,000 barrels, to 1.6 million barrels per day (for the entire 2017, production in this country collapsed on 29%). Over the past year, cartel members complied with the agreement by an average of 95%, and the growth in US production levelled their efforts by about 60%, according to the IEA. Nevertheless, the oil revenues of OPEC and its partners grew in 2017under the agreement. Members of the cartel earned an additional $ 362 million a day, with about $ 100 million accounted for by Saudi Arabia. The greatest amount was extracted by Russia, which earned an additional $ 117 million a day.
The world oil market as a whole will be balanced this year, if OPEC and Russia comply with the agreement, expects the IEA note. In December, the global supply of oil dropped by 405,000 barrels per day, to 97.7 million barrels per day, according to the IEA. Global demand for oil was 97.8 million barrels per day in 2017 and should increase to 99.1 million barrels per day in 2018, according to the IEA. The volume of production outside OPEC next year should reach 59.8 million barrels per day.
OPEC made a similar forecast. The cartel expects that oil production in non-member countries will grow by almost 1.2 million, to 58.8 million barrels per day in 2018. This is 160,000 barrels per day more than previously expected. Basically, it raised his forecast due to "higher expectations of growth in the US and Canada." OPEC also predicts that the global demand for oil will increase by about 1.5 million to 98.5 million barrels a day.
Oil prices fell on Friday. Brent crude fell by 0.9% to $ 68.68 per barrel. "[The market] changed the mood slightly and it became clear that production outside of OPEC will increase dramatically this year," says Capital Economics economist Caroline Bain (quoted in The Wall Street Journal).
"In the short term, the situation looks good. It will become somewhat more complicated by the second half of the year, when the market sees additional volumes of extraction," adds Nicolas Robin, managing investments in the commodity markets of Columbia Threadneedle Investments.
source: wsj.com
The US Energy Information Administration (EIA) confirmed the increase in US oil production this week. According to the organization, for the week to January 12, production in the country increased by 258,000 barrels per day, to 9.75 million barrels per day.
In November, OPEC and ten non-cartel countries, including Russia, agreed to extend the agreement to reduce oil production before the end of 2018. The deal was concluded in late 2016 to eliminate the surplus supply of oil on the world market and support prices for it. This agreement, as well as a strong decline in oil production in Venezuela and geopolitical risks contributed to the recovery of oil prices. In January, the price of Brent reached $ 70 per barrel for the first time since 2014.
OPEC production in December fell to 32.23 million barrels per day, according to the IEA, including due to the fall in Venezuela by 216,000 barrels, to 1.6 million barrels per day (for the entire 2017, production in this country collapsed on 29%). Over the past year, cartel members complied with the agreement by an average of 95%, and the growth in US production levelled their efforts by about 60%, according to the IEA. Nevertheless, the oil revenues of OPEC and its partners grew in 2017under the agreement. Members of the cartel earned an additional $ 362 million a day, with about $ 100 million accounted for by Saudi Arabia. The greatest amount was extracted by Russia, which earned an additional $ 117 million a day.
The world oil market as a whole will be balanced this year, if OPEC and Russia comply with the agreement, expects the IEA note. In December, the global supply of oil dropped by 405,000 barrels per day, to 97.7 million barrels per day, according to the IEA. Global demand for oil was 97.8 million barrels per day in 2017 and should increase to 99.1 million barrels per day in 2018, according to the IEA. The volume of production outside OPEC next year should reach 59.8 million barrels per day.
OPEC made a similar forecast. The cartel expects that oil production in non-member countries will grow by almost 1.2 million, to 58.8 million barrels per day in 2018. This is 160,000 barrels per day more than previously expected. Basically, it raised his forecast due to "higher expectations of growth in the US and Canada." OPEC also predicts that the global demand for oil will increase by about 1.5 million to 98.5 million barrels a day.
Oil prices fell on Friday. Brent crude fell by 0.9% to $ 68.68 per barrel. "[The market] changed the mood slightly and it became clear that production outside of OPEC will increase dramatically this year," says Capital Economics economist Caroline Bain (quoted in The Wall Street Journal).
"In the short term, the situation looks good. It will become somewhat more complicated by the second half of the year, when the market sees additional volumes of extraction," adds Nicolas Robin, managing investments in the commodity markets of Columbia Threadneedle Investments.
source: wsj.com