Published: Tue, March 06, 2018
Economy | By

IEA: Output in US Oil to Jump in Upcoming Five Years

IEA: Output in US Oil to Jump in Upcoming Five Years

The production cuts that helped lift oil prices above $60 a barrel are also unleashing a supply surge from non-OPEC rivals including Brazil and Canada, which will cover all growth in global demand until 2020, the IEA said.

The bullish forecast kick-starts the annual CERAWeek conference, a gathering of thousands of oil executives, traders, bankers and investors in Houston.

U.S production of crude oil is expected to rise by over 2.7 billion to slightly more than 13.1 billion barrels per day by 2023 due to growth from shale, which is known as light tight oil, will more than offset the drops in conventional supply.

Canadian oil and gas industry purchases of USA goods and services are expected to have an impact of $45.6 billion on the US economy from 2017 through 2027, according to the Canadian Energy Research Institute. As a result of new investments in pipelines and other infrastructure that ease the current bottlenecks, US crude export capacity reaches almost 5 MMbpd by 2020 and Corpus Christi solidifies its position as the primary North American crude-oil outlet.

With total USA liquids production set to reach almost 17 million barrels per day in 2023, the United States will be recorded as the world's top oil liquids producer.

Industry sentiment is indeed improving along with rising prices, but major oil companies are reluctant to invest vastly higher sums.

Crude oil prices are growing on Monday before the meeting of OPEC and USA shale companies in Houston, which raises expectations that oil producers will be discussing how to further clean up the global overproduction of the raw materials.

Kachikwu said that the rapid growth in shale supply is "not just a problem for OPEC, it's a problem for the entire oil industry".

OPEC and other non-OPEC members, who are led by Russian Federation, agreed in December to extend oil supply cuts until the end of this year.

"With limited additional demand for these volumes in the domestic refining system, future USA production will need to clear into export markets", Wood Mackenzie's chief economist Ed Rawle said in a release Monday.

The Paris-based agency saw little to no increase in spending on exploration outside the U.S. in 2017 and 2018, and warned that additional investment will be needed to spur supply growth after 2020. The US was once the world's top oil importer. Output there is expected to double by 2023.

Meanwhile, non-OPEC production is set to increase as much as 5.2 million barrels per day by 2023 to 63.3 million barrels per day, with the U.S. alone accounting for more than half of global supply growth.

Like this: