The International Energy Agency (IEA) predicted on Tuesday that the United States will surpass Russia as the world’s biggest oil producer by sometime next year, if not sooner. “U.S” shale growth is very strong, the pace is very strong…The United States will become the No. 1 oil producer sometime very soon, said IEA Executive Director Fatih Birol, speaking in Tokyo. U.S. output exceeded 10 million barrels per day late last year for the first time since 1970 and is expected to surpass 11 million barrels per day by the end of 2018. The production increase in the U.S. directly counteracts OPEC’s production cuts which are aimed at keeping prices higher.
U.S. crude imports fell last week by 1.6 million barrels per day to its lowest level since 2001, when the EIA began recording this data, while its exports continue to rise, taking away from OPEC and Russia’s market share. The latest figures released last Thursday from the EIA put U.S. production at 10.27 million barrels per day, slightly more than Saudi Arabia’s current output, and just under Russia’s output.
Analysts’ concerns over the U.S. production increases send oil prices lower on Tuesday, with U.S. WTI futures trading at $63.84 per barrel, a 0.11 percent decline. Brent crude futures were down 0.13 percent to $67.41 per barrel. According to Reuters, U.S. crude inventories are expected to rise another 2.7 million barrels last week, a number that will be confirmed by data out later today and tomorrow. The American Petroleum Institute will release its data later today and the EIA will report again tomorrow.