Abu Dhabi: The US could become the world’s largest oil producer by the end of 2018 or next year due to rise in shale oil production, according to analysts.
Shale oil production from the US has been going up in the last few months as oil prices rise due to production cut agreement between Opec and non-Opec member countries and geopolitical tensions in the Middle East and elsewhere.
“It is entirely within the realm of possibility that the US could become the world’s largest oil producer in 2018 or 19 if current trends continue. The rebound in oil prices resurrected the US oil sector with production increasing after the downturn of the past few years,” said Justin Dargin, a global energy expert at the University of Oxford told Gulf News.
He also added that the production is likely to exceed 10 million barrels per day for the rest of 2018 and could touch 11.4 million barrels per day in 2019 which is a record for the US.
The previous record for US oil production was in 1970 when oil production reached 9.63 million barrels per day.
Giving a short term outlook on oil prices, he said Brent crude, a global benchmark, could average $70 (Dh257) to $75 per barrel during the summer months as Opec supply restrictions remain firm. Brent was trading at $69.34 per barrel, up by 0.84 per cent and US crude West Texas Intermediate at $64.94 per barrel, up by 0.87 per cent when markets closed on Friday.
“We are going through a particularly volatile phase in oil prices at the moment,” he said.
“In general, there was always a seasonal factor to oil price volatility that would see oil prices increase around spring due to the anticipation of the summer driving season in North America. However, there is an increase in shale oil production in North America that could act as a brake on the rising oil price.”
Opec and producers outside the group are cutting production by about 1.8 million barrels per day in order to prop up prices under a deal that is to expire at the end of 2018. Opec is restraining production by about 1.2 million barrels per day and the rest is shared by Russia and other countries.