U.S. Oil Output to Top Saudi Arabia
CBJ — This is not the news OPEC nations want to hear: U.S. oil production is booming and is forecast to top that of Saudi Arabia and Russia.
That’s the forecast coming from the International Energy Agency.
American oil production is already at its highest level in 50 years and is expected to push past 10 million barrels a day this year as higher prices entire more producers to start pumping.
Along with gains here in Canada, rising U.S. output will drive up non-OPEC supply by 1.7 million barrels per day.
The price of crude has risen about 50% since June, with the U.S. benchmark now trading around $63 US a barrel.
The OPEC-Russia deal worked for them: as prices rose they made more money despite pumping less crude, the IEA said. Russia is estimated to have earned an extra $117 million a day and Saudi Arabia $100 million daily by limiting their output and nudging up prices.
But the higher prices also brought back U.S. producers, particularly in shale oil, which requires higher prices in order to break even. It’s also a way to keep OPEC prices from going through the roof.
Global demand for oil is forecast to grow by 1.3 million barrels a day, the same as the year before. It’s not growing faster because some consumers are reducing spending on oil because of the higher prices and switching to other types of energy, like natural gas.