UNITED STATES – The International Energy Agency (IEA) said that the US is preparing to become the world’s largest oil producer in 2019. Increasing production at shale fields compensates for the steady growth in demand for oil and a reduction in supplies by other producers, writes the Financial Times.
Oil production outside OPEC in January fell by 175 thousand barrels per day (b / s) to 58.6 million b / s, but was 1.3 million b / s higher than in January last year, for increasing production in the US by 1.3 million b / s in annual terms.
The production of crude oil in the United States will soon exceed production in Saudi Arabia. The US can outstrip Russia by the end of the year and become a “world leader” in oil production, the IEA’s monthly report on the oil market said.
According to the US Energy Information Administration (EIA), the country’s oil production could reach 11 million b / s by the end of this year.
The fall in oil prices forced US oil companies to cut costs dramatically and become more efficient. Now that oil prices have recovered, they are drilling more wells and production is growing again.
IEA increased the forecast for the growth of world oil demand for 2018 from 1.3 million b / s to 1.4 million b / s. In a stronger global economy, the total oil consumption is expected to be 99.2 million b / d.
However, production growth in non-OPEC countries, headed by the US this year will be more than expected, and will be 1.8 million b / s. The total volume of production outside the cartel will reach 59.9 million b / s.
The agency noted that the situation resembles the first wave of the American shale boom, which was caused by higher prices and prompted world producers from OPEC and Russia to continue fighting for market share.
OPEC and a group of producers outside the cartel, including Russia, agreed on November 30 to extend the agreement to reduce production by the end of 2018.
Production in the OPEC countries in January was basically stable and amounted to 32.16 million bpd. The level of implementation of the agreement on the reduction of production reached 137%, in part because of the decline in Venezuela. The economic crisis paralyzed most of the country’s oil-producing capacities.
According to the IEA, the demand for OPEC oil in 2018 will average 32.3 million b / s after a decline to 32 million b / s in the first quarter of the year.
– Oil reserves –
Commercial oil stocks in OECD countries in December decreased by 55.6 million barrels to 2.851 billion barrels. This is the maximum monthly decline in inventories since February 2011, the IEA noted.
In 2017, in general, stocks fell by 154 million barrels, that is, they decreased by 420 thousand b / s. By the end of the year, oil reserves were only 52 million barrels higher than the average five-year period, and oil reserves are below this level.
“With such a sharp reduction in the surplus [of oil], the success of the production agreement may be close, but this is not necessarily so: oil prices stopped growing and turned in the opposite direction, and according to our balance of supply and demand can also happen with a decline in oil reserves, at least at the beginning of this year, “- said the IEA.