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American crude oil output is set to rise by 1.8 million barrels per day from the nation’s largest shale producing areas over the next year, according to new forecasts by the U.S. Energy Information Administration (EIA).
Just next month, national output will climb up 111,000 bpd.
The Drilling Productivity Report, which tracks production from the seven most prolific basins in the US, also said production in January should touch 6.438 million barrels per day, which is 24,000 bpd higher than December levels.
The 1.8 million-jump equals the volume of production cuts sustained by the Organization of Petroleum Exporting Countries and several allied nations, including Russia, who have agreed to contribute to the global market rebalancing plan. So far, prices have risen steadily through 2017 after a year of indecision in 2016, but the international plan is set to expire in December 2018, with members conducting an official review of the deal in June.
Russia’s energy minister said last week that OPEC and the non-OPEC coalition would begin discussing the possibility of a “smooth exit” from the production cuts, according to Reuters. Russian energy minister Alexander Novak also tried to tamp down concerns about prices rising too much too fast, arguing that the rally approaching $70 was likely temporary. “We see that the market is becoming balanced. We see that the market surplus is decreasing, but the market is not completely balanced yet,” he told reporters. “Of course, we need to continue monitoring the situation.”
Rises in U.S. oil production will account for 80 percent of the global oil production increase by 2025, and this production increase will match an increase in demand. 2025 will mark the peak of oil demand, if the International Energy Agency’s projections are accurate. From then on, demand decline consistently, pressured by fuel efficiency and alternatives to internal combustion engines.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…