The US is poised to become the world’s largest oil producer in 2019, the International Energy Agency said, with stellar output from shale fields offsetting robust demand growth and supply cuts by other producers.
US crude output, which is up 1.3m barrels a day compared to last year, will soon pass Saudi Arabia and could overtake Russia by the end of the year to become “the global leader”, the IEA said on Tuesday.
“All the indicators that suggest continued fast growth in the US are in perfect alignment,” the Paris-based energy body said in its monthly oil market report.
The oil crash forced US producer companies to cut costs dramatically and become more efficient. Now, as oil prices have rebounded, they are drilling more wells and production is swelling again.
“US 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.
The IEA raised its forecast for 2018 global oil demand growth to 1.4m b/d, on a stronger global economy, with total consumption expected at 99.2m b/d.
But non-Opec output growth — led by the US — this year will stand at a greater than expected 1.8m b/d, taking total production from outside the cartel to 59.9m b/d.
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SOURCE: FT, Anjli Raval