US will ‘reinforce its leadership’ as the world’s top crude producer in 2019, IEA says
The level of crude output from the U.S. will once again be a major factor this year, the International Energy Agency (IEA) said its closely-watched report on Friday, with the energy giant on track to reaffirm its position as the world’s leading crude producer.
The IEA report comes shortly after OPEC and non-OPEC producers officially implemented a fresh round of supply cuts.
Alongside Russia and nine other nations, top oil exporter Saudi Arabia struck a deal with the rest of OPEC in December to keep 1.2 million barrels per day (b/d) off the market from the start of January.
“While the other two giants voluntarily cut output, the U.S., already the biggest liquids supplier, will reinforce its leadership as the world’s number one crude producer,” the Paris-based IEA said Friday.
“By the middle of the year, U.S. crude output will probably be more than the capacity of either Saudi Arabia or Russia.”
Brent crude has fallen almost 30 percent since climbing to a peak of $86.29 in early October last year, while WTI is down more than 31 percent over the same period.
The collapse in oil prices was exacerbated by concerns about oversupply, as well as a stock market slump amid worries over rising U.S. interest rates.
That prompted OPEC and non-OPEC producers to throttle back output at the start of 2019, in an effort to try to put a floor under falling oil prices.
The IEA has previously touted the “growing influence” of the U.S. in global oil markets, saying such a dramatic rise in crude output could soon challenge the market share of OPEC kingpin Saudi Arabia and non-OPEC heavyweight Russia.
U.S. crude production has soared in recent months, rising by more than 2 million b/d to an unprecedented 11.9 million b/d.
The IEA said Friday that its estimates for global oil demand growth in 2018 and 2019 remained unchanged at 1.3 million b/d and 1.4 million b/d, respectively.
The group said the impact of higher oil prices in 2018 was “fading,” which should help to offset cooling economic growth over the coming months.
On Thursday, a report from OPEC showed its production fell sharply last month, easing energy market fears of a prolonged period of oversupply.
Oil supplies from OPEC nations plunged by 751,000 barrels per day to nearly 31.6 million bpd, according to independent figures cited by OPEC in its monthly report.