US to overtake Russia as top oil producer by 2019: IEA

TOKYO: The United States will overtake Russia as the world´s biggest oil producer by 2019 at the latest, the International Energy Agency (IEA) said on Tuesday, as the country´s shale oil boom continues to upend global markets.

IEA Executive Director Fatih Birol said at an event in Tokyo the United States would overtake Russia as the biggest crude oil producer "definitely next year", if not this year.

"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," he told Reuters separately.

U.S. crude oil output rose above 10 million barrels per day (bpd) late last year for the first time since the 1970s, overtaking top oil exporter Saudi Arabia.

The U.S. Energy Information Administration said early this month that U.S. output would exceed 11 million bpd by late 2018. That would take it past top producer Russia, which pumps just below that mark.

Birol said he did not see U.S. oil production peaking before 2020, and that he did not expect a decline in the next four to five years.

The soaring U.S. production is upending global oil markets, coming at a time when other major producers - including Russia and members of the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) - have been withholding output to prop up prices.

U.S. oil is also increasingly being exported, including to the world´s biggest and fastest growing markets in Asia, eating away at OPEC and Russian market share.

Meanwhile, U.S. net imports of crude oil fell last week by 1.6 million bpd to 4.98 million bpd, the lowest level since the EIA started recording the data in 2001, reflecting further erosion in a market OPEC has been relying on for decades.

Birol said production growth was not just strong in the United States. "Canada, especially the oil sands, and Brazilian offshore projects. These are the two major (non-U. S.) drivers," he said.

On the demand side, Birol said the IEA expected growth of around 1.4 million bpd in 2018.

OPEC chief expects 2018 oil market balanceMeanwhile AFP reported that the OPEC chief Suhail al-Mazrouei said Tuesday he expected the global oil market to be balanced this year, as producers continue to trim production following a 2014 market crash. "I am optimistic that this year, we will achieve a market balance" between supply and demand, Mazrouei, also the energy minister of the United Arab Emirates, told the Global Financial Markets Forum in Abu Dhabi.

Oil producers from OPEC and non-OPEC countries struck a historic deal in late 2016 to cut output by 1.8 million barrels per day, following a surplus in crude supply that sent prices crashing in 2014.

Compliance to the cuts hit 133 percent in January, which Mazrouei said exceeded the percentage required in the deal.

The compliance rate was 129 percent in December and 122 percent in November. Oil prices have rebounded to around $70 a barrel as a result of the policy.

Mazrouei said cooperation between oil producers including Russia had reached levels that were "more than expected".

from The News International - Business http://ift.tt/2oBcwsf