US poised to overtake Saudi Arabia and Russia as top oil producer in 2018 amid "rapid" growth in output

 
Courtney Goldsmith
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Oil prices recently rose to $70 a barrel (Source: Getty)

US oil production is set to grow faster than previously expected amid a "volatile" year in 2018, the International Energy Agency (IEA) said today as it revised its figures.

The Paris-based agency raised its forecast for 2018 crude oil growth in the US from 870,000 barrels per day (bpd) to 1.1m bpd and said the country's output could soon top 10m bpd to overtake that of Saudi Arabia and Russia.

Overall, nations outside the Organisation of the Petroleum Exporting Countries (Opec) are expected to drive up supply by 1.7m bpd in 2018 compared with a 700,000 bpd increase last year.

"This represents, after the downturn in 2016 and the steady recovery in 2017, a return to the heady days of 2013-2015 when US-led growth averaged 1.9m bpd," the IEA said.

Increased production in the US could also outweigh potentially steep declines in Venezuela, which posted the world's biggest unplanned fall in 2017.

In December, Venezuela's output dropped to 1.61m bpd, near a 30-year low. As a result of further declines this year, Opec's crude output in December fell to 32.23m bpd.

The market is expected to balance for the year as a whole, with the first half in a modest surplus and the second half in a modest deficit, so long as compliance is maintained in an Opec-led deal to curb output, which has helped boost oil prices to over $70 a barrel in recent weeks.

The IEA said: "Whether or not the recent price rise has run out of steam and seventy really is plenty remains to be seen.

"However, such are the geopolitical uncertainties and the ever-dynamic prospects for US shale that we should expect a volatile year."

In its monthly oil report yesterday, Opec also raised its oil supply forecast from countries outside the cartel, including the US, while global demand is set to slow.

Read more: Oil prices have fallen by one per cent today on rising US production

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